SLA Meaning: Here’s What It Means and How To Use It

Understanding SLA’s meaning is one of the most important parts of doing business in the modern world. Here’s what you need to know about SLA!

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An essential part of providing a service with a high level of customer satisfaction is creating clarity on what assistance you provide. If you are providing a service or looking for a service of any kind, then you’ll want to know exactly what to expect. Quality service delivery and high performance are all about meeting expectations, and that’s why the concept of a Service Level Agreement (SLA) is so important. 

While the ideas behind SLAs used to be only used in traditional circumstances regarding a contract, SLAs are now being used by countless service providers of modern amenities. SLA metrics are used to inform customers of numerous key performance indicators, which is a massive part of ensuring the customer gets what they need. No matter where you are in the customer-company relationship, knowing the meaning of SLA is absolutely critical. 

Here is everything you need to know about an SLA, how it works in the modern world, and how to analyze it for your personal needs 

What Is an SLA? 

The SLA is an essential tool for understanding the level of service that you will provide as a company or receive as a customer. It sets a baseline of performance metrics delivered to the end-user and functions as a service agreement between two parties. This can be used in many different services, including E-commerce, cloud computing, IT services providers, call centers, data centers, outsourcing, SAAS companies, and more. 

The point of the SLA is to make sure that customer expectations line up with the customer experience. It is used as a template for service quality and helps companies know which areas to invest in when optimizing their workloads. 

This kind of service management is also used to reduce any extra financial penalties that might result from downtime from a company. Often, companies want to cover themselves just in case their cloud services go down due to an outage or lack of uptime. 

Maintaining a 100% service performance SLA is virtually impossible. However, having a more realistic SLA can cover liabilities so that a company can effectively deal with things in a low response time. 

How Does an SLA Work? 

SLAs are commonly used throughout the world, but they’re primarily found within services that have a pricing system that they need to follow. These often work in tangent with a company’s KPIs and help them ensure a company knows exactly what they can and should be offering in terms of service to their customers. 

In many cases, an SLA works in close conjunction with a help desk. SLAs will often dictate the resolution time that customers will experience or the amount of time their services will usually take. SLAs often also inform customers about general warranty information, which can help provide clear guidelines on what to do when there is a conflict escalation. 

In other circumstances, SLAs are used to determine how different parts of a single organization will operate with each other. They are commonly used to create clarity and organization in companies, from small startups to giant corporations like Microsoft. It helps to ensure that there won’t be any excessive exclusions with how people operate in a company and makes its communication and culture much easier to define. 

How To Understand an SLA

While there are many different SLA policies, it’s usually pretty easy to understand how they work. 

Within a multilevel SLA, you can see service expectations on a corporate, customer, and service level. In most cases, these documents list what levels and types of services have been deemed the most beneficial for all parties. These agreements can commonly be found any time you sign a contract with a company, and they will often detail the expectations that you can have going forward. 

It is also very common to find an organization’s SLA on its website. Most companies make them readily available because they want to create an appealing SLA worth advertising. Doing a little bit of research can often turn up the documents and answers you’re looking for and inform you of everything that needs to be done in the case of discrepancies. 

Almost all SLAs will be put into the contract that a person signs when agreeing to do business with a company. While it’s common to just blast through reading a contract in the modern world, intentionally reading it can help to inform you of what you can expect from a company. T

his is valuable information that can help you in countless ways, ranging from setting proper expectations to even providing you service credit in the case of a failure to keep to the SLA on the company’s part! 


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  1. SLA | Cambridge English Dictionary
  2. What is a Service Level Agreement (SLA)? | Techopedia
  3. Service level agreement (SLA) – Glossary | CSRC