What is a Service Level Agreement (SLA)?

In tech, a service is nothing without its users. What is Spotify without any listeners, or Twitch without any streamers? Today’s user is well-informed and holds the services they rely on to high standards. If a user can’t trust a service to perform as promised – especially a paid service – they will likely move on to another option.

As companies push to continuously improve the reliability of their services and deliver premium user experiences, Service Level Agreements are being created to hold themselves to higher and easily measurable standards. A Service Level Agreement (SLA) is a well-defined agreement between a vendor (the company providing the service) and the clients/users. SLAs outline specific promises made by the company regarding key service metrics that matter to the user, such as uptime/availability and incident response time.

Companies that consistently deliver on the promises made within an SLA often develop extremely loyal user relationships, as well as a more efficient and reliable service. Just take a look at how loyal we all are to Google who constantly meets their promise of 99.99% service availability.

However, SLAs are not just about setting an ambitious goal and then promising your users that you’ll meet that goal. Your company must first decide on the right type of SLA, and then have an effective way of tracking how well your service is meeting the promises made in the SLA. Otherwise your team could be set up for failure with your service falling short of user expectations.

The 3 Types of SLAs

There are three different types of SLAs. The right SLA type for your company will depend on the services that your company (the vendor) is providing your users (the client).

Service Level (or Service-Based) SLA

A Service Level, or Service-Based SLA, is an agreement that covers one type of service for all customers. Service Level SLA are generally the most straightforward and easiest for vendors.

Customer-Based SLA

A Customer-Based SLA is an agreement between individual customers and the service provider. Customer-Based SLAs may include multiple services under a single contract.

Multi-Level SLA

Multi-Level SLAs are customized agreements designed to fit the specific needs of the customer. Multi-Level SLAs address contracts at Corporate, Customer, and Service levels and are associated with that specific group of customers.

Why is SLA Tracking Important?

SLAs create an agreement between a service and the customer. The customers’ trust in the service then grows as IT teams work to continuously deliver on the promises made to customers in the SLA. Once an SLA is created, systems for tracking must be in place to measure how well the service is performing.

In order to meet the requirements set in the SLA, it’s important to have a good system for SLA tracking. The SLA helps to provide your team with a clear understanding of customer expectations, and goals that must be met. However, if SLAs are not being tracked properly, teams may not be able to respond to incidents as quickly as needed in order to make good on their promises regarding service availability and user experience.

Common Challenges of SLA Tracking

Tracking SLAs can pose several challenges for an IT team. Being prepared for the roadblocks will help set your team up for success.

Some common SLA tracking challenges include:

  • SLA tracking requires pulling lots of metrics and writing custom code to track performance. Tracking often requires plenty of raw data and custom-written queries.
  • Making changes/updates to SLA tracking can be very time-consuming. Because a lot must be hard-coded, making changes to SLA tracking systems and processes can take days.

SLA Best Practices

There are several best practices that can help with creating, tracking, and reporting on SLAs. Some tips we recommend for SLA best practices include:

  • Make sure to set up your SLA so that it does not track TTR (time to resolution) while waiting for customers to reply. If a customer takes a long time to reply, or something requires a third party escalation, it can negatively impact your response time, making it appear as though your team spent longer to resolve an issue than they actually did.
  • Keep SLAs simple and write them in a way that is easily understood. Including too many goals can make it extremely difficult for IT teams to monitor and deliver on the promises made to customers in the SLA. The goals of an SLA must be clear in order for teams to understand what needs to be measured to track performance.
  • Create a series of small SLAs rather than a large complex one. This goes back to keeping SLAs simple and easy to understand. Including too much in one SLA can make it difficult to understand and accurately measure.
  • Restrict certain SLAs to business hours. While it is important for some SLAs to run 24/7, others can be restricted to normal business hours. If all SLAs are running 24/7, support teams can quickly become slammed, and certain SLAs may not require an immediate weekend response.

The Best Tools for Improving Your SLA Tracking

SLA tracking is key to measuring the success of your team’s SLAs and how well you’re delivering on the promises to your users. While much of the tracking must be hard-coded, there are some great tools to help make things easier for SLA tracking.

Some of our favorite SLA tracking tools include:

  • SolarWinds VoIP & Network Quality Manager is a popular Windows Server application that includes autodiscovery of custom alerts and reporting for use with SLA tracking.
  • DataDog SLA Monitoring is a cloud-based monitoring tool that offers customizable dashboards and real-time monitoring, forecasting, and alerts.