What is a Service Level Agreement (SLA)?

A service level agreement (SLA) is a documented contract between a service provider and a customer. It states the performance standards the provider agrees to meet.

The agreement sets measurable targets such as response times, resolution times, and service availability. It also clarifies responsibilities when incidents or requests occur.

Within Service Level Management (SLM), SLAs act as the reference point for evaluating IT service performance. Internal IT teams and external providers rely on them to track results, maintain accountability, and meet agreed commitments.

Why are service level agreements important? 5 benefits of SLAs 

SLAs ensure that both clients and the service providers understand the exact nature and quality of service to be rendered. 

• From a client’s perspective, an SLA guarantees that the requested services will be delivered; it assures the client that they will fit their requirements. The SLA dictates the standards for every service provided and how these standards will be measured. 
   
• From a service provider perspective, the SLA ensures clear communication between them and the client. It removes (to a large extent) ambiguity between client expectations and what the service provider understood. It reduces the possibility of a dispute over services delivered, and if a conflict does occur, the SLA offers remedial mechanisms. 

The document also dictates the deliverables from the client’s end as well. It specifies the elements or resources, such as different documents, access credentials, information, and other resources the service provider may need to deliver the services.

Key benefits of SLAs include:

1. Clear expectations: Both service providers and customers understand performance standards and responsibilities.
2. Improved accountability: Defined metrics and penalties ensure providers deliver on their commitments.
3. Better service quality: Regular tracking of SLA metrics helps maintain and improve service performance.
4. Dispute resolution: SLAs provide a reference point to resolve disagreements over service issues.
5. Stronger customer relationships: Reliable service builds trust and satisfaction, leading to long-term partnerships.

3 types of SLAs

Most ITSM frameworks group SLAs into three core types based on who the agreement applies to and how it is structured.

• Customer-based SLA: A single agreement that covers all services provided to a specific customer or business unit. Each customer can have different targets and conditions, even when using the same services.
• Service-based SLA: An agreement that defines the same service targets for every customer using a particular service. Email support or VPN access are typical examples, where performance commitments remain consistent across users.
• Internal SLA: An agreement between teams or departments within the same organization. These SLAs set expectations for internal service delivery, such as infrastructure support for an application team.

SLAs vs. OLAs vs. SLOs vs. XLAs

These concepts describe different ways of defining, supporting, and measuring service performance. While they are closely related, each one focuses on a different layer of the service relationship.

• SLA (service level agreement): A formal agreement between a service provider and a customer. It defines service commitments that are visible to the business, such as response times, resolution targets, and availability.
   
• OLA (operational level agreement): An internal agreement between teams that support an SLA. OLAs define how internal groups collaborate to meet external commitments, but they are not exposed to customers.
   
• SLO (service level objective): A specific performance target used to measure service reliability or quality. SLOs act as internal goals that help teams stay within SLA limits, often set more aggressively than the SLA itself.
   
• XLA (experience level agreement): A measurement framework focused on user experience rather than technical metrics. XLAs use indicators like satisfaction scores or perceived effort to assess how users experience a service.

SLA components

The exact components of a service level agreement may vary between service providers, industries, and the clients' specific requirements. There are many guidelines on how to create an SLA. That said, most of them follow a general pattern.

These are the six main aspects of an SLA:

1. A description of the services.
2. The service levels for each of them.
3. How the services will be monitored and assessed.
4. Service Management.
5. Remedial measures in case the provider was unable to meet the specified levels.
6. When and how the SLA may be terminated or renewed.

Besides these components, customers or service providers may add additional elements, such as the goals of the parties involved (for a general good faith interpretation of the SLA) or situations in which the SLA doesn’t apply or is wholly voided.

How do SLAs work?

SLAs require an ITSM platform to work operationally. While the agreement itself is contractual, enforcement depends on having a system that can measure and track performance objectively.

Manual monitoring doesn't scale and creates disputes. An ITSM platform timestamps every interaction (when tickets are created, acknowledged, escalated, and resolved), and then compares these against your SLA targets to determine compliance.

The system will include:

• Timers to track every open ticket against SLA deadlines.
• Alerts to notify teams before breaches occur.
• Dashboards to show compliance across all services.
• Reports that document performance for both parties.

Both the provider and customer can see the same data: whether commitments are being met, where problems exist, and what the track record shows. This is important because SLAs trigger real consequences. Missing an SLA isn't just a note in a report – it can mean:

• Service credits or refunds to the customer.
• Penalty fees deducted from payments.
• Automatic escalations to management.
• Rights to renegotiate or terminate the contract.

How to create an SLA in InvGate Service Management?

Here’s how to create an SLA with InvGate Service Management.

1. Log in as an administrator and go to Settings → Requests → SLA. Click Add under First Response or Resolution, depending on what you want to measure.
   1. First Response SLA tracks time until the first agent reply.
   2. Resolution SLA tracks time until the request is closed.
2. Name the SLA and set the target time. Give the SLA a clear Title, then define the allowed time before it expires. Here, you also decide how time is counted: continuously from request creation, or only during the working hours of the involved help desks.
    
3. Control pauses and changes. Choose when the SLA should pause, such as outside business hours or during custom shifts and holidays. You can also decide whether the SLA should be re-evaluated if the request changes, and whether previously elapsed time should be kept when that happens.
    
4. Set the Conditions that determine which requests the SLA should cover. These can be based on things like category, priority, help desk, or requester type. Conditions are grouped, and a request must match at least one condition in each group for the SLA to apply.
    
5. Define actions tied to the SLA. Configure what should happen when the SLA reaches a certain point or expires. Actions can include notifications, priority changes, escalations, reassignment to another help desk, approval triggers, or integrations through web services.
    
6. Save and prioritize the SLA. Save the rule, then review it in the SLA list. The order of SLAs matters: rules higher in the list take priority, so drag and reorder them to reflect which commitments should apply first.

With InvGate Service Management, you can define First Response and Resolution SLAs, apply them through conditions and schedules, and adjust them as services change.

It also includes:

• A visual indicator on each ticket showing whether the SLA is met, paused, or exceeded.
• The option to configure different SLA policies for multiple departments, not just IT.
• Customizable dashboards and reports to monitor SLA performance over time.
• The AI-powered Smart Request Escalations feature to help prevent SLA breaches before they happen.

You can explore these features with a 30-day free trial and see how they work together in practice.

Service level agreement examples

A service level agreement documents specific service commitments between IT and the business. A well-defined SLA describes what is covered, how performance is measured, when the commitment applies, and what happens if targets are missed. Below are some practical examples:

• Incident Management SLA: “High-priority incidents (Priority 1) submitted through the service desk will receive an initial response within 15 minutes and be resolved within 4 hours, measured during help desk working hours. If the resolution target is at risk, the request will be escalated to the on-call support group.” This SLA defines scope, priority, response, and resolution targets, time calculation, and escalation behavior.
   
• Service availability SLA: “The service will maintain 99.9% availability per calendar month, excluding scheduled maintenance windows communicated at least 48 hours in advance. Availability is measured at the application layer and reported monthly.” Availability SLAs typically include measurement methods, exclusions, and reporting frequency.
   
• Request fulfillment SLA: “Standard employee access requests submitted via the self-service portal will be completed within one business day, provided all required approvals are granted, and the request information is complete.” Request-based SLAs often depend on prerequisites, which must be stated explicitly to avoid disputes.

A complete SLA should also state what happens when targets are not met. Breach handling clarifies accountability and avoids disputes by defining consequences in advance. 

Common approaches include service credits, where customers receive discounts or free service time; proportional credits tied to the severity or duration of the breach; or fixed financial penalties for missed commitments. In longer-term agreements, repeated breaches may also trigger contract reviews or renegotiation. Writing this section clearly helps both parties understand their rights and obligations and turns the SLA into an enforceable agreement rather than a best-effort statement.

How to achieve SLA compliance and fulfillment?

SLA compliance and SLA fulfillment are closely related, but they’re not the same thing. One focuses on meeting the agreed targets, the other on putting the right practices in place so those targets can be met consistently.

Achieving SLA compliance starts at request intake. Tickets need to be categorized and prioritized correctly so the right SLA applies from the beginning. Automated assignment rules help route requests to the right help desk and apply response and resolution targets without manual intervention. Time tracking also needs to reflect real operating conditions, counting only working hours, shifts, and holidays where appropriate.

Visibility is what keeps SLAs from slipping. Dashboards, warnings, and notifications give agents and supervisors advance notice before a target is missed. That lead time allows teams to escalate, reassign, or adjust priorities while there’s still room to act.

SLA fulfillment depends on how well the service operation is set up. Requests should have clear ownership, with minimal handoffs between teams. Internal agreements such as SLOs and OLAs set earlier targets that support the main SLA and absorb variability in day-to-day work.

Regular reviews tie everything together. SLA reports highlight recurring breaches, unrealistic targets, or routing issues. Adjusting rules, schedules, or targets based on real data helps keep SLAs achievable and aligned with how services are actually delivered.

SLA best practices

• Make SLAs specific and measurable so they describe concrete service commitments instead of intentions. Clear targets and simple language make them easier to monitor, discuss, and use as a reference when questions come up.
   
• Align SLA targets with business goals and delivery capacity, not arbitrary numbers. SLAs should encourage consistent performance and improvement, not create pressure that leads teams to work around the system.
  
  “SLAs are not meant to be weapons. If you’re punishing analysts for missing targets, they’ll find ways to game the system—and that’s when you lose sight of the bigger picture.” Linda Lenox, Senior Technology Operations Leader, Episode 96 of Ticket Volume.
   
• Avoid a single SLA model for all services and customers. Different services have different impact, urgency, and expectations, and SLAs should reflect those differences while keeping a shared structure.
   
• Treat SLAs as management tools rather than enforcement tools. Regular reviews, internal agreements, and realistic adjustments help SLAs support service improvement instead of becoming a source of conflict.
   
• Complement SLAs with XLAs to capture service quality beyond technical targets. Meeting uptime or response-time goals does not guarantee that users can work effectively. Delays, rework, or poor communication can still create frustration even when SLAs are technically met, which is why many teams add experience-based metrics to understand real service impact.