writing service level agreements

Service Level Agreement (SLA) Examples and Template

Most service providers understand the need for service level agreements (SLAs) with their partners and customers. But creating one might feel daunting because you don’t know where to start or what to include. In this article, we share some SLA examples and templates to help you create SLAs.

What is an SLA?

An SLA is a documented agreement between a service provider and a customer that defines: (i) the level of service a customer should expect, while laying out the metrics by which service is measured, as well as (ii) remedies or penalties should agreed-upon service levels not be achieved. It is a critical component of any technology vendor contract.

Before subscribing to an IT service, the SLA should be carefully evaluated and designed to realize maximum service value from an end-user and business perspective. Service providers should pay attention to the differences between internal outputs and customer-facing outcomes , as these can help define the service expectations.

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Writing slas: an sla template.

Let’s examine a sample SLA that you can use as a template for creating your own SLAs. Remember that these documents are flexible and unique. Make changes as necessary, and ensure that you correctly identify and include the relevant parties. Also, consider additional topics that you may want to add to your agreement(s) to enhance them, such as:

• Review or monitoring period. How often the service provider and customer may review the terms of the SLA; perhaps, annually.
• Service credits. Something the service provider may offer in case your SLA is not achieved.
• A rider. Used when amendments to an SLA occur.
• End-of-contract or liquidation terms. This defines how and when customer or service provider can opt out of the SLA.

There are several ways to write an SLA. Below is a mock table of contents that you can leverage to start writing your own SLAs.

Now, I’ll break down each section with a few details and examples.

The first page of your document is simple, yet important. It should include:

• Version details
• Document change history, including last reviewed date and next scheduled review
• Document approvals

Last Review: MM/DD/YYYY

Next Scheduled Review: MM/DD/YYYY

2.0. Agreement overview

In the next section, the agreement overview should include four components:

• The SLA introduction
• Definitions, convention, acronyms, and abbreviations (a glossary)
• Contractual parameters

2.1. SLA introduction

Include a brief introduction of the agreement, relevant parties, service scope, and contract duration. For instance:

This is a Service Level Agreement (SLA) between [Customer] and [Service Provider]. This document identifies the services required and the expected level of services between MM/DD/YYYY to MM/DD/YYYY.

Subject to review and renewal scheduled by MM/DD/YYYY.

Signatories:

2.2. Definitions, conventions, acronyms, and abbreviations

Include a definition and brief description of terms used to represent services, roles, metrics, scope, parameters, and other contractual details that may be interpreted subjectively in different contexts. This information may also be distributed across appropriate sections of this document instead of collated into a single section.

2.3. Purpose

This section defines the goals of this agreement, such as:

The purpose of this SLA is to specify the requirements of the software-as-a-service (SaaS) solution as defined herein with regards to:

• Requirements for SaaS service that will be provisioned to [Customer]
• Agreed service targets
• Criteria for target fulfilment evaluation
• Roles and responsibilities of [Service Provider]
• Duration, scope, and renewal of this SLA contract
• Supporting processes, limitations, exclusions, and deviations.

2.4. Contractual parameters

In this section, you’ll want to define the policies and scope of this contract related to application, renewal, modification, exclusion, limitations, and termination of the agreement.

This section specifies the contractual parameters of this agreement:

• Contract renewal must be requested by [Customer] at least 30 days prior to expiration date of this agreement.
• Modifications, amendments, extension, and early termination of this SLA must be agreed by both signatory parties.
• [Customer] requires a minimum of 60 days’ notice for early termination of this SLA.

3.0. Service agreement

This section can include a variety of components and subsections, including:

• KPIs and metrics
• Service levels, rankings, and priority
• Service response
• Exceptions and limitations
• Responses and responsibilities
• Service management

3.1. KPIs and metrics

Key performance indicators (KPIs) and other related metrics can and should support your SLA, but the achievement of these alone does not necessarily result in the desired outcome for the customer.

3.2. Service levels, rankings, and priority

3.3. Service response

3.4. Exceptions and limitations

Include any exceptions to the SLA conditions, scope, and application, such as:

This SLA is subject to the following exceptions and special conditions:

• [Service Provider] must ensure cloud service availability of 99.9999% during holiday season dated MM/DD/YYYY to MM/DD/YYYY.
• [Service Provider] may not be liable to credit reimbursement for service impact to data centers in Region A and Region B due to natural disasters.
• Response to requests of severity level 6 or below by [Customer] can be delayed up to 24 hours during the aforementioned holiday season.
• Requests for special arrangements by [Customer] may be expedited as per pricing structure specified in Appendix A.1.

3.5. Responses and responsibilities

Here, you’ll define the responsibilities of both the service provider and the customer.

[Customer] responsibilities:

• [Customer] should provide all necessary information and assistance related to service performance that allows the [Service Provider] to meet the performance standards as outlined in this document.
• [Customer] shall inform [Service Provider] regarding changing business requirements that may necessitate a review, modification, or amendment of the SLA.

[Service Provider] responsibilities

• [Service Provider] will act as primary support provider of the services herein identified, except when third-party vendors are employed, who shall assume appropriate service support responsibilities accordingly.
• [Service Provider] will inform [Customer] regarding scheduled and unscheduled service outages due to maintenance, troubleshooting, or disruptions, or as otherwise necessary.

3.6. Service management

Include service management and support details applicable to the service provider in this section.

3.6.1. Service availability

Service coverage by the [Service Provider] as outlined in this agreement follows the schedule specified below:

• On-site support: 9 AM to 6 PM, Monday to Friday, from January 5, 2023 to December 20, 2023.
• Phone support: 24 hours as per Section 3.2. of this agreement.
• Email support: 24 hours as per Section 3.2. of this agreement.

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References and glossary.

Include reference agreements, policy documents, glossary, and relevant details in this section. This might include terms and conditions for both the service provider and the customer, and any additional reference material, such as third-party vendor contracts.

The appendix is a good place to include relevant information that doesn’t seem to fit elsewhere, such as pricing models and charges. The following section is an example of information that you may want to append to your SLA.

A.1. Pricing models and charges

Include the pricing models for each service type with detailed specifications.

SLA best practices

Though your SLA is intended to be a legally binding agreement, it doesn’t need to be incredibly lengthy or overly complicated. It can further be a malleable document that is improved upon over time, with the consent of all relevant parties. Our advice: Begin building an SLA using the template above and the examples found herein and consult with your customers for any perceived gaps. As unforeseen circumstances are often inevitable, you can always revisit and tweak the SLA, if needed.

Additional resources

Additional SLA templates and examples are available here:

• Columbia University IT (PDF)
• SLA Template

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What is a service-level agreement (SLA)? Definition, templates, and examples

My first experience in a B2B model got off to a horrible start. Day after day, furious customers would flood my mailbox with complaints, and I felt like a failure.

Instead of doing product management, I ended up doing a kind of customer relationship management. I had to deal with complaints like the following:

• “I’m unhappy with the response time. Yesterday I opened a critical request, and nobody responded”
• “I’m highly dissatisfied with your resolution time. Despite answering my request in two days, I had no clue when my problems were finally solved”
• “Over the last two months, I have experienced downtime four times, which is unacceptable.”

As an inexperienced B2B product manager, it took me a couple of months to understand the real problem: unclear expectations from customers and no service-level agreement whatsoever.

In this guide, we’ll define what a service-level agreement (SLA) is, explore common types of service-level agreements, and review what’s included in a typical SLA.

Note : This article is intended to provide general information about service-level agreements and is not a substitute for professional legal advice. The templates and examples provided in this article should be used as a starting point and not as definitive legal documents. Always consult with your company’s legal department before drafting, finalizing, or signing any service-level agreement.

What is a service-level agreement (SLA)?

A service-level agreement (SLA) is a contract between a service provider and a client that clearly outlines the expectations and responsibilities of both parties. This agreement sets the standards for the level of service the provider will deliver, detailing specific metrics such as response time, resolution time, and product-specific conditions.

The goal of a service-level agreement is to maintain transparency between the provider and the client, ensuring consistent service quality and accountability.

In any relationship, all parties need to know what to expect (and what not to expect) from each other. Whenever that exchange is unclear, frustrations and conflicts arise.

As in the story I shared earlier, the lack of an established agreement regarding response time, resolution time, and uptime can lead to a discrepancy between how you perceive the quality of your product and how your customers perceive it. Whenever you leave something up to interpretation, you will be surprised, and not in a fun way.

With a SLA, all parties agree on a time range to address the available services. When the range isn’t respected, a fine may be applied to the side breaking the agreement. The penalty isn’t mandatory, but it’s a common practice in B2B.

Who is responsible for writing service-level agreements?

The task of writing a service-level agreement typically falls on the service provider because it best understands the capabilities and limitations of the service. That said, creating SLAs is a collaborative effort that involves input and negotiation from both the service provider and the customer.

It’s crucial for both parties to be involved in the process to ensure that the agreement is realistic, achievable, and mutually beneficial. Lawyers and/or the company’s legal department may also be involved to ensure that the agreement is legally sound and protects the interests of both parties.

What is included in a service-level agreement?

A basic, generic service-level agreement typically includes information and articulates expectations around the following:

• Services — A detailed description of the service provided
• Responsibilities — Who is responsible for each part of the service
• Performance measurement — Detailed KPIs to track and their respective targets
• Problem management — Processes and contingency plans for when a service issue arises
• Customer duties — What is expected of the customer in the relationship
• Legal compliance — All legal aspects of the service, such as data protection and confidentiality
• Termination — How to terminate the agreement

When writing a SLA, it’s particularly important to articulate the expected response when service issues arise. This includes clearly communicating the service provider’s obligations around the following:

Reaction time

Response time

Resolution time

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How long does it take for you to look at something? It’s one thing to look at an issue and another to actually answer your customers’ cries for help.

People are anxious; don’t leave them high and dry without any information.

How long do you respond to requests? A bug impacting all your users has a higher priority than a time on your footer.

Set expectations and, preferably, categorize the expected response time based on the importance of a given issue.

You may not work on all requests from your stakeholders because some of them are unimportant to your product. Your response time consideration should include the time and effort it takes to explain those decisions.

More great articles from LogRocket:

• How to implement issue management to improve your product
• 8 ways to reduce cycle time and build a better product
• What is a PERT chart and how to make one
• Discover how to use behavioral analytics to create a great product experience
• Explore six tried and true product management frameworks you should know
• Advisory boards aren’t just for executives. Join LogRocket’s Content Advisory Board. You’ll help inform the type of content we create and get access to exclusive meetups, social accreditation, and swag.

What is your application availability? For example, an uptime of 99.5 percent means you can have a downtime of three hours and 45 minutes per month, while 99.9 percent means you can be down only 45 minutes per month.

This is fundamental because you need to understand the business and your application. Commonly, you need some windows to run upgrades in your application.

Types of service-level agreements (with templates)

Service-level agreements come in various formats. The three most common SLA types for external customers are:

• Customer-based
• Service-based

Customer-based SLAs

A customer-based service-level agreement is tailored to meet the individual requirements of a single customer. This type of SLA covers all the services that the client uses.

Customer-based SLAs are unique and flexible, enabling you to customize the agreement based on the specific customer’s needs. However, it can be resource-intensive for the same reason.

Customer-based SLA template

A typical customer-based SLA might include the stipulations outlined in the template below. To use the SLA templates in this article, copy/paste the following into a document or spreadsheet and replace the text in brackets with information specific to your agreement:

• Customer name : [Customer’s Name]
• Services : [Detailed list of services]
• Availability : [Specific uptime percentage]
• Response time : [Specific response time range]
• Resolution time : [Specific resolution time range]
• Penalty : [Specific penalties for SLA violations]

Service-based SLAs

Service-based service-level agreements apply to all customers using the services provided. It is a standardized agreement, which means it’s easier to administer because there’s only one agreement for any number of customers.

However, service-based SLAs lack the flexibility to cater to individual customer needs.

Service-based SLA template

Here’s an example of what a service-based SLA might include:

• Service : [Specific Service]

Multilevel SLAs

Multilevel service-level agreements are a combination of customer-based and service-based SLAs. They provide a balance between standardization and customization, allowing you to provide different levels of service for different customer groups.

For example, a basic service level may apply to all customers, with premium service levels available for an additional fee.

Multilevel SLA template

Here’s a basic template for a multilevel SLA:

• Customer group : [Specific group of customers]

Customer-based vs. service-based vs. multilevel SLAs

Service-level agreement example

To provide a clear understanding of how service-level agreements work in practice, let’s look at examples of each type of SLA:

• Customer-based SLA example
• Service-based SLA example
• Multilevel SLA example

Customer-based example

Let’s consider the example of a software-as-a-service (SaaS) company that provides billing applications.

A customer-based SLA between the company and client could guarantee 99.9 percent uptime, a maximum response time of two hours for high priority issues, and a resolution time of 24 hours for critical issues. The SLA would be specific to this client.

Such a service-level agreement might look like this:

• Service — Project management tool
• Performance — 99.9 percent uptime
• Reliability — Resolution of critical issues within 24 hours
• Responsiveness — Response time of 2 hours for high priority issues

Service-based example

In a service-based scenario, a SaaS customer relationship management provider might offer its services to multiple clients. The SLA might guarantee an uptime of 99.99 percent, data refresh frequency of once every hour, and a response time of 4 hours for support queries. This SLA would apply to all clients using that company’s services.

A service-based SLA between a CRM provider and its customers might look like this:

• Service — CRM service
• Performance — Data refresh frequency of once every hour
• Reliability — Uptime of 99.99 percent
• Responsiveness — Response time of 4 hours for support queries

Multilevel example

A company providing project management services to a large organization with many departments might opt for a multilevel SLA that assigns service tiers to various departments based on their unique needs.

For instance, developers might be guaranteed a response time of one hour, while the marketing might be guaranteed a response time of three hours.

This single SLA would cover the diverse service levels required by the different departments within the organization.

• Service — Communication applications
• Performance — Varies based on department needs
• Reliability — Consistent service across all departments
• Responsiveness — Response time of 1 hour for Engineering department; 3 hours for Marketing department

Measuring KPIs

It’s fundamental to measure the health of your SLA. If you overpromise, you’ll receive loads of complaints. But how do you determine your actual capacity? Learning by doing is my answer.

First, determine which specific metrics related to the performance, reliability, and responsiveness of your product or service are most important to monitor. Ensure you measure all expectations mentioned previously for each category.

For example, whereas general response time isn’t helpful, the response time for critical and noncritical issues is actionable. This could mean tracking the average time it takes to respond to and resolve technical issues reported by customers or the time it takes to deliver software updates or patches.

In addition to response times, you should also monitor system uptime. Uptime is a crucial KPI for any SaaS business because low uptime can signal reliability issues that might breach the SLA and negatively impact the customer experience.

Other important KPIs to track might include the error rate of your software or the frequency and severity of bugs and crashes. These metrics provide insights into the quality of your product and can inform efforts to improve its reliability and performance.

My key learning is to set alerts when things go wrong. This helps you react faster instead of learning you have a problem once it becomes too big. For product managers, this might mean setting up automated notifications that alert you when a certain error rate threshold is exceeded or when system uptime falls below a specified level.

You don’t need to make it complicated. A simple dashboard with all key metrics will get the job done. Whenever something is out of your SLA, that should be clear so that it doesn’t go unnoticed.

I used to think setting detailed SLAs was a time waster and over-engineering. Now, I recognize the truth lies somewhere in between.

Not having a SLA is a no-go. At the same time, an overly complex SLA will confuse all parties involved and ultimately be unhelpful. The most important aspect is to craft an SLA that every party can agree to.

Key takeaways:

• Set realistic timelines
• Continuously reflect on how satisfied your customers are with your services
• Understand how sustainable it is for your team to keep the SLAs
• Monitor KPIs
• Inspect, review, and adapt

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The Ultimate Guide to Service Level Agreements (With Help Desk SLA Examples)

Published: June 07, 2023

Whether you're working with a new customer or another department at your company, one of the most critical steps for alignment is creating a service level agreement (SLA). However, you may be wondering, "what is an SLA and how do I write one?"

Traditionally, an SLA serves to define exactly what a customer will receive from a service provider. Here, we'll explain the different types of SLAs, what they include, how to create one, and examples to draw inspiration from.

Service Level Agreement (SLA)

A service level agreement (SLA) is a contract that establishes a set of deliverables that one party has agreed to provide another. This agreement can exist between a business and its customers, or one department that delivers a recurring service to another department within that business.

Ultimately, a service level agreement is designed to create alignment between two parties by setting clear expectations and mitigating any issues before they happen. With that in mind, there are multiple types of SLA depending on your use case.

What are the 3 types of SLA?

• Customer Service Level Agreement
• Internal Service Level Agreement
• Multilevel Service Level Agreement

1. Customer Service Level Agreement

A customer SLA is just what it sounds like: an agreement by a vendor to deliver a certain level of service to a particular customer. Here's a fun example:

In the TV show The Office, the company, Dunder Mifflin, supplies paper to various organizations. They might have a customer SLA stipulating that Dunder Mifflin will supply [Company X] with 50 reams of paper per month, shipped every Monday to [Address 1] and [Address 2] by Darryl Philbin — with a confirmation of delivery sent to Jim Halpert. (Sorry, we had a little too much fun with the references in that one.)

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2. Internal Service Level Agreement

An internal SLA only concerns parties from within the company. While a business might have an SLA open with each of its clients, it can also have a separate SLA between its sales and marketing departments.

Let's say Company X's sales department has to close $5,000 worth of sales per month in total, and each sale is worth $100. If the sales team's average win rate for the leads they engage with is 50%, Company X's marketing director, Amir, can work with the sales team on an SLA, stipulating that Marketing will deliver 100 qualified leads to sales director, Kendra, by a certain date every month. This might include four weekly status reports per month, sent back to Amir by Kendra, to ensure the leads Kendra's team is receiving are helping them keep pace with their monthly sales goal.

3. Multilevel Service Level Agreement

Multilevel SLAs can support a business's customers or the business's various internal departments. The point of this type of SLA is to outline what is expected of each party if there's more than just one service provider and one end user. Here's an example of a multi-level SLA in an internal situation:

Company X's sales and marketing teams partner up on an internal SLA that delivers leads from Marketing to Sales every month. But what if they wanted to incorporate a customer retention strategy into this contract, making it an SLA between Sales, Marketing, and Customer Service?

After sales closes 50 new deals for the month, it's Customer Service's job to keep these customers happy and successful while using the product. In a multi level SLA, Company X can have sales director, Kendra, send monthly "customer friction" reports to Joan, the VP of service, based on dialogue the sales team has regularly with its clients. This helps the customer service team build a knowledge base that better prepares them for the pain points customers call them about.

You can learn more about customer service's increasing role to business growth in the HubSpot Academy .

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How to write an sla.

• Define the scope of service.
• Specify the responsibilities of both parties.
• Set performance metrics.
• Define the reporting requirements.
• Establish the escalation process.
• Specify penalties and incentives.
• Put it all together.

A thorough and effective SLA ensures that the expectations of both parties are clearly defined and understood, leading to a successful and productive partnership. To write an SLA, you should:

1. Define the scope of service.

Defining the scope of service is an essential part of writing an SLA because it details the service that is to be received and the level of support that will be provided.

It also outlines the expected performance and quality levels, as well as the hours of operations.

The scope of service should be thorough enough to ensure that everyone involved has a shared understanding of what is being offered, how it will be delivered, and what can be expected.

2. Specify the responsibilities of both parties.

Specifying the roles of both parties helps to ensure that there is a shared understanding of the service delivery process, the points of contact, and who is responsible for what.

This helps set clear expectations and avoid misunderstandings of conflicts that might occur during the service delivery process.

3. Set performance metrics.

Performance metrics establish a baseline for measuring the success of the service provided.

They help define the objectives of the service, specify what needs to be delivered, and ultimately, ensure that the services are delivered in an efficient and effective manner.

Plus, high-quality performance metrics can demonstrate the value of the service, as well as provide a means to improve the services provided based on feedback gathered from the metrics themselves.

4. Define the reporting requirements.

In addition to setting performance metrics, you should also define reporting requirements when writing an SLA. This provides a way to track the progress of the service delivery process, ensuring that the SLA is being adhered to.

Reporting requirements outline how, when, and what information should be reported on the performance of the service delivered to the recipient.

These requirements can include regular SLA reviews, performance monitoring reports, and other metrics relevant to the success of the service delivery process.

Not only will this ensure transparency in the service delivery process, but it will also promote better communication between both parties, and identify any issues that need addressing.

5. Establish the escalation process.

When an issue occurs, having an escalation process in place outlines the steps to be taken to resolve the issue promptly and effectively.

Not only does it provide a clear path for communication between the service provider and the recipient in the event that something goes wrong, it can also help prevent delays in addressing issues, reduce the likelihood of conflict, and ensure that issues are resolved in a timely manner.

Plus, an escalation process can help to identify recurring issues in the service delivery process, providing a means of continuous improvement in the service.

6. Specify penalties and incentives.

Penalties and incentives provide a level of accountability for the service provider while also incentivizing them to provide the best quality of service to the recipient. They can be used to encourage quality service delivery, motivate effective response to incidents, and ensure the fulfillment of commitments in the SLA.

Penalties can be financial or non-financial and may include discounts, refunds, or additional services, among others, for failing to meet specific service level targets.

On the other hand, incentives, like bonuses and additional services, can be offered to motivate service providers to achieve the highest performance levels.

7. Put it all together.

Once you and the other party have considered the steps above, gather all the information you have, format it in a document, and share it with all stakeholders. Allow everyone time to read through the details and provide feedback.

After each party has agreed to the conditions of the SLA, have them sign it on a final draft and distribute.

Keep in mind that SLAs should exist as a living document. Therefore, if issues arise and the service level needs to be adjusted, the document should be revised to reflect the changes and redistributed to all stakeholders.

What does an SLA include?

The details of an SLA will differ among internal and external agreements. Nonetheless, there are common building blocks that each SLA should include, whether the recipient of the service is your customer or your sales team.

Featured Resource: Free Marketing & Sales SLA Template

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HubSpot's Sales & Marketing SLA Template is the ideal resource for outlining your company's goals and reaching an agreement between these two crucial teams. Download it now for free.

1. A Summary of the Agreement

The first item on your SLA should be an overview of the agreement. What service have you agreed to deliver to the other party? Summarize the service, to whom it's being delivered, and how the success of that service will be measured.

2. The Goals of Both Parties

In external SLAs — those between a business and its customers — the goals stated in the agreement are primarily those of the customer. If this is your intention, work with your client to marry their needs with the abilities of your product, and come up with a measurable goal that your company can feasibly meet for the client on a regular basis.

Is this an internal SLA between your sales and marketing departments? Both teams should have their goals outlined in this section of the contract, while making sure that when Marketing hits its goal, Sales can reach its own goal as a result.

3. The Requirements of Both Parties

SLAs should include what each party needs in order to reach their goals. In agreements that serve a customer, keep in mind their needs might go beyond simply "the product." They might need more than that to reach their goals — such as weekly consulting, reporting, and technical maintenance from you.

SLAs between sales and marketing teams should describe what they might need from the opposite department in order to help them hit their targets. Marketing, for example, might need weekly status reports on Sales' pipeline so the marketers can adjust their lead-generating campaigns accordingly.

4. The Points of Contact

Who's in charge of making sure each party's goals are met? Sort out which team does what, and who talks to whom, in this section of your SLA. Is there a separate employee using the services, in relation to the employee who reports on performance every week? Make it clear who's involved in the SLA, and how.

5. A Plan if Goals Aren't Met

You might not want to think about it, but there should be formal consequences when a goal isn't met as part of an SLA. Don't freak out, though — these consequences aren't always business-ending situations. Include a form of compensation to the service's end user for when the service doesn't meet their agreed-upon goals. In external SLAs, according to PandaDoc , this compensation can come in the form of "service credits." Grab PandaDoc's free SLA template here to find out more.

For Sales and Marketing SLAs, work with your sales team to establish a plan for how any lost revenue is to be made up as a result of an unreached sales quota. You might settle on a strike system that holds certain employees — in both Sales and Marketing — accountable for diagnosing and resolving issues of low performance.

6. The Conditions of Cancellation

Under what circumstances will your SLA be terminated?

Whether your contract serves a customer or two internal departments, you'll typically find yourself putting the SLA on the chopping block when it's just not working. Maybe your goals have gone unmet for the last three months, or the current agreement simply doesn't have buy-in from everyone involved.

Come up with formal conditions under which you'd cancel the current SLA in pursuit of, hopefully, a better SLA.

Fill out the form to get the free template.

Examples of slas.

While an SLA will be unique to your needs, here are some examples and templates that can give you an idea of what an SLA may look like.

1. HubSpot's Marketing & Sales SLA Template

As previously mentioned, HubSpot has a template for marketing and sales service level agreements. Instead of being overly complicated, the template provides straightforward, no-nonsense sections so that any party can skim at a glance.

What we like best: It's laid out in a two-column style to easily denote which team is responsible for which activities and metrics. Having them side-by-side like this further underscores the goals of partnership and alignment.

How to Implement This in Your SLA

Simplicity is the key to recreating this SLA template. Whether you use HubSpot's offering or create your own, effectively implementing this type of SLA means resisting the temptation to list out every possible outcome and instead focus on the big picture of goals, initiatives, and accountability.

2. Hivehouse Digital's Marketing & Sales SLA Template

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This sales and marketing SLA template focuses heavily on metrics, making it a great choice for high-performance teams. The design relies on tables for easy information input and even comes with prompts/examples to help you define the agreement.

What we like best: The document is organized step-by-step, making it a great choice for teams without a formalized SLA process (yet).

Implementing the Hivehouse model for your SLA means leaning into its step-by-step strengths. By breaking down SLAs into smaller and more manageable steps, there's less chance of you and your team getting overwhelmed.

3. Lucidchart's Marketing and Sales SLA Template With Examples

Instead of going through the process of creating an SLA, this template organizes sections by the marketing and sales process itself, from goals to lead qualification, handoff, and nurturing.

What we like best: The template takes a visual approach with columns for marketing, sales, and shared goals. This makes ownership of deliverables crystal clear throughout the process.

Seeing is believing in this type of SLA template. While the nitty-gritty details are there, this approach uses color and shape to highlight important categories and actions. If you're planning to take this approach to your SLA, use color psychology and graphic design principles to create a visually appealing SLA.

4. AT&T's Small Business Service Agreement Example

Here's a real-world example in the wild. Not all SLAs are between marketing and sales teams or even other internal departments. Here's an SLA that lays out a service agreement between AT&T and its customers, setting expectations for the engagement. They make this SLA publicly accessible for all their users.

What we like best: The agreement is plain and simple, leveraging bullet points to make each detail clear and understandable.

AT&T's real-world example highlights the importance of calling out what matters — in this case, by using bullet points. Applying the same approach to your SLA means distilling larger and more complicated outcomes into easily-understood snippets that don't leave room for confusion.

5. Microsoft SLA Example for Online Services

As a service provider, Microsoft also makes its SLA for customers public. The SLA uses bullet points to clearly identify its offerings and customer promises, which are unique depending on the plan and services rendered.

What we like best: The SLA is organized with headings for quick navigation to the offerings that are most pertinent, and information is kept concise with an optional "View full details" link.

In-depth SLAs are naturally complicated, making it easy to get bogged down in the details despite best efforts to keep things simple. Microsoft's example offers a streamlined approach to implementation: Call out the key details and then provide links to the full SLA text.

6. PandaDoc's Multi-Page SLA Template

PandaDoc provides another option for provider/client agreements and is a great choice for more formal arrangements.

What we like best: This template makes for a clear and concise SLA with times, dates, and solid expectations.

While this type of SLA leans more toward legalese with language like "whereas" and "therefore", it has the advantage of a solid narrative structure to describe expectations. If you're planning to implement something similar, consider using a template to speed up the process rather than starting from scratch.

How to Make an SLA for Marketing and Sales Alignment

While SLAs are common between businesses and new customers, they can also improve internal alignment. When one exists between sales and marketing departments in particular, this agreement details marketing goals (like number of leads or revenue pipeline) and the sales activities that'll follow and support them (like engaging leads that were qualified by the marketing team).

Both the sales and marketing departments use this document as a commitment to support each other based on concrete, numerical goals. And guess what? 87% of sales and marketing leaders say collaboration between sales and marketing enables critical business growth.

Now, if you don't have a Sales and Marketing SLA in place, fear not: We've outlined how to create one below so that you can easily start aligning your sales and marketing teams.

To draft your SLA, you first need to align your Sales and Marketing teams around a shared set of goals — or, as we put it before, the harmonious "Smarketing." This alignment can then dictate the creation of a written SLA that reflects these goals. Here's how to create an SLA with "Smarketing" in mind:

1. Calculate a numerical marketing goal based on the sales team's quotas.

As a marketing department, not only should you have a concrete goal for each campaign you run, but you also should have a high-level numerical goal that aligns with the sales team's operations. At the end of the day, that'll mean qualified leads and actual sales from those leads.

Salespeople are driven almost entirely by their sales quotas — the numerical goals that correlate with their compensation and job security. If Marketing commits to a similar, related numerical goal, it shows that the team is being held accountable in a manner similar to Sales. The trick, however, is to make sure your numerical goal can effectively power the sales team's numerical goal.

In order to calculate the marketing side of your SLA, you'll need the following four metrics:

• Total sales goal (in terms of revenue quota)
• % revenue that comes from marketing-generated leads (as opposed to sales-generated ones)
• Average sales deal size
• Average lead-to-customer close %

Then, it's time to do some calculations:

• Sales quota x % revenue from marketing-generated leads = Marketing-sourced revenue goal
• Marketing-sourced revenue goal ÷ Average sales deal size = # of customers needed
• Customers ÷ Average lead-to-customer close % = # of leads needed

2. Segment your goals by specific intervals during the year.

It might also be a good idea to reevaluate the marketing side of the SLA each month, as a variety of factors can change the numbers used in your calculations over time. To do so, create a document that tracks your SLA calculations by month, which should include the following metrics:

• # of marketing-generated leads
• # of those leads that became customers
• Revenue from those closed customers
• Total revenue closed that month from marketing-generated leads only
• Total revenue closed that month

You will also need:

• The average sales cycle length

With the figures above, you can re-calculate the metrics you started with on a monthly basis, or at whichever interval suits your business — quarter, year, etc. Just make sure the same measure of time is used for both Sales and Marketing to maintain alignment. Have a look:

• # marketing-generated leads that became customers ÷ # marketing-generated leads = lead-to-customer close %
• Revenue from closed customers ÷ # of marketing-generated leads that became customers = sales deal size
• Total revenue closed from marketing-generated leads / total revenue closed = % revenue from marketing-generated leads

You could also take it one step further, and incorporate quantity and quality into these metrics. The above calculations provide you with a quantitative volume goal of marketing-generated leads. However, we know that not all leads are created equal, and as a result, some may be considered higher- or lower-quality than others.

For example, a decision-making executive might be a more valuable contact than an intern. If that's the case, you can do the above analysis for each subset of leads, and set up separate goals for each type/quality level.

Want to take it even further? Measure in terms of value, instead of volume. For example, a CEO may be worth $100, for instance, while a director is $50, a manager is $40, and so on.

3. Calculate sales' figures and their goals.

The sales side of the SLA should detail the speed and depth to which a salesperson should follow up with marketing-generated leads. When establishing this end of the SLA, consider these two sales statistics :

• Salespeople who follow up with leads within an hour are nearly seven times more likely to have meaningful conversations with a decision maker on the other end.
• However, only 7% of leads respond to a follow-up contact within five minutes after filling out a form.

Bottom line? Not all leads may be fit to send to sales immediately. They often need to meet some minimum level of quality, like reaching a certain activity level, which can only take place after being nurtured by Marketing.

Nonetheless, engaging a lead the short time after he/she converts is critical to maintaining a relationship with them — the question you have to answer is what that engagement should look like. Either sales or marketing should take action to start building that relationship, make nurturing easier, and set up the sales rep for success when she eventually does reach out.

Keep in mind this advice is futile if you don't consider the bandwidth of your sales reps. Sure, in a perfect world, they'd make six follow-up attempts for each lead — in reality, though, they may simply not have enough hours in the day to do that. For that reason, you'll also need to factor in the number of leads each rep is getting (based on the marketing SLA), how much time they spend on marketing-generated leads versus sales-generated leads, and how much time they have to spend on each one. If you're looking to conserve time, some of the follow-up — email, in particular — could be automated, so look into options there.

4. Set up marketing SLA reporting.

Now that you have your SLA goals, it's time to track your progress against that goal — daily.

To start, graph the goal line using this formula:

Where n is the number of days in the month and g is your monthly goal.

That should determine what portion of your monthly goal you need to achieve each day. You'll want to graph that cumulatively throughout the month and mark your cumulative actual results on the same chart. We call that a waterfall graph, and it looks something like this:

5. Set up sales SLA reporting.

For the sales SLA reporting, you'll have two graphs — one monitoring the speed of follow-up, and the other monitoring the depth of follow-up.

To graph the speed of follow up, you'll need the date/time the lead was presented to sales, and the date/time the lead received her first follow-up. The difference between those two times equals the time it took for sales to follow up with that particular lead.

Take the averages of lengths of time it took for sales to follow up with all leads within a particular timeframe — day, week, month — and chart it against the SLA goal.

To graph the depth of follow-up — e.g., the number of attempts — look specifically at leads that have not been connected with, since the goal of the follow-up is to get a connection. For leads over a certain timeframe that have not received outreach, look at the average number of follow-up attempts made, and graph that against the SLA goal.

6. Communicate, celebrate, and address the achievement (or lack thereof).

Maintaining strong communication regarding how each team is performing on goals boosts transparency. If either team isn't reaching their goals, addressing that confirms their importance, while celebrating hitting those goals can aid motivation.

If you're not sure where to begin when it comes to setting these goals, check out our free Marketing & Sales Lead Goal Calculator , designed to help you determine and track the goals that will eventually become part of your SLA.

SLA Best Practices

Define realistic goals, ensure everyone is on board, get specific, pinpoint key metrics, account for the unexpected, double-check the details, review and revise as needed.

To ensure you're getting the most from SLA creation, implementation and management, it's worth aligning your efforts with industry best practices. Some of the most common include:

While promising the moon might seem like a good idea, things can quickly go off track when SLA outcomes aren't met. As a result, it's worth starting SLA creation with a brainstorming session that includes relevant stakeholders. Here, the goal is to define what you want to do, what you can do, and what you can reasonably offer.

Next, make sure all relevant parties feel like their needs are being met with your draft SLA. Better to find out up-front that there are potential problems — and make proactive changes — than face pressure to scrap in-place service level agreements and start over.

Specificity is what makes SLAs work. For example, if you're an IT service company drafting an SLA about uptime, the number of "nines" — 99.999 percent, 99.9999 percent, etc. — defines exactly how much uptime you're agreeing to provide. Using specific terminology reduces the risk of conflict around SLA expectations by removing ambiguity.

While specific SLAs are a solid starting point, you also need ways to effectively measure the success of your agreement. In the uptime example above, minutes of downtime per year are often used to determine if goals are being met. When it comes to marketing or sales, meanwhile, metrics could include leads generated, deals closed, or any other measurement that makes sense under your SLA structure.

Unexpected events — such as severe weather, staffing challenges, or sudden IT failures — can make SLA goals challenging to reach. As a result, it's worth creating clauses that account for unexpected events. While there's no way to predict exactly what will happen, and obligations remain to meet at least minimum standards, building in some breathing room for the unexpected is well worth the effort.

Even small details matter. Consider the example above: While 99.999 percent uptime works out to just over 5 minutes of downtime per year, 99.9999 percent is 31 seconds. Here, a misplaced 9 could put your company on the hook for providing service levels that are almost impossible to reach. As a result, it's worth getting your SLA double-checked by a fresh pair of eyes before moving forward.

Service level agreements aren't static documents. While they cover a set period and describe a specific set of actions, both provider and partner needs can change during that time. As a result, it's worth building in the option for review part way through the SLA agreement period and conducting a full review when the contract is up to determine if changes are required.

One Last Step When It Comes to SLAs

When it comes to what should be in your service level agreement, there's one final piece: Review these metrics on a regular basis to monitor your progress, and make sure both Sales and Marketing have access to the reports for both sides of the SLA.

This step helps to maintain accountability and transparency and allows for both teams to address issues — or congratulate each other on productive results.

Editor's Note: The post was originally published in January 2019 and has been updated for comprehensiveness.

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Published: 30 May 2024 Contributor: Michael Goodwin

A service level agreement (SLA) is a contract between a service provider and a customer that defines the service to be provided and the level of performance to be expected. An SLA also describes how performance will be measured and approved, and what happens if performance levels are not met.

SLAs are generally formed between a vendor and an external customer, but companies also use SLAs internally to formalize agreements between departments or teams.

SLAs are an important part of outsourcing and information technology (IT) vendor contracts, providing an end-to-end view of the working relationship. They help ensure that all stakeholders have an accurate understanding of the service agreement.

SLAs set customer expectations, hold providers accountable and ultimately help optimize the end-user experience . SLAs pave the way for a smoother working relationship, settling uncertainty and points of contention from the start, and help protect the interests of all parties involved.

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There are 3 primary types of service level agreements: customer-level (sometimes called customer-based SLAs), service-level and multilevel SLAs.

A customer-based SLA is an agreement between a service provider and a customer, whether the customer is external or internal. This agreement describes the service or different services that will be provided to the customer. For example, this agreement might be between a third-party cloud services provider and a tech company outlining the performance expectations of applications hosted in the cloud .

An internal SLA is an agreement between two different departments, teams or sites within the same organization. This agreement might be between development and business teams outlining the deployment cadence and overall expectations for a certain application or product.

A service-level SLA is a contract that details a defined service that is provided to multiple customers. If a provider offers a product with the same level of service and support regardless of the customer, they might use a service-level SLA.

For example, IT service management (ITSM) teams might use a common SLA for all customers that outlines the level of service customers can expect from their service desk when they contact the company for service support or to report an incident.

A multilevel SLA is an agreement split into different levels to incorporate more than two parties, or different levels of service, into the same agreement. A multilevel SLA might be used between an organization and multiple external providers, such as in a  multicloud  model with numerous  public cloud  providers. The agreement can also be set up between more than two internal teams or departments.

An organization that offers a product at different pricing plans or service levels, such as a SaaS product, for example, might also use a multilevel SLA that describes the service level and expectations for each product tier.

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SLAs vary by company, product and the specific business needs of each organization, but most SLAs contain similar features. Key components include:

An overview section introduces the agreement and its most basic features, such as the parties involved, a broad outline of the services to be provided, and the start date and duration of the agreement.

This section delineates the specific services provided and all related details. It includes information on service delivery, turnaround times for deliverables, maintenance schedules, relevant dependencies and any other relevant information. This section should provide a thorough accounting of all factors and circumstances.

A stakeholder section lists all parties involved in the agreement, what their roles and responsibilities are and how to contact them. A primary contact is often designated as the go-to contact for reporting end-user issues.

A performance section details the agreed upon service availability and service performance standards, and what metrics will be used to measure performance. This is usually defined within a service level objective (SLO)—an agreement within an SLA that establishes an agreed-upon performance target for a particular service over a period of time.

It often includes a workflow outlining how information will be collected and shared with stakeholders. All parties should carefully consider both the performance levels and the metrics used to gauge performance, because they are central to the entire agreement.

This section lists services or aspects of service delivery that are exempted from the agreement. This section excludes downtime due to issues with the customer’s equipment or factors outside of reasonable control (force majeure). It might also include exceptions for scheduled maintenance, dictating that such windows do not count against guaranteed uptime agreements.

A security section describes the security protocols and standards that the provider maintains and provides information on how the provider protects customer data. It also lists nondisclosure agreements (NDAs) and any measures involved with protecting sensitive information or intellectual property.

This section defines the penalties that either side will incur should they not fulfill the terms of the agreement. It details escalation procedures, time frames for resolutions and the compensation to be provided should the service provider not fulfill the terms of the SLA. The compensation might be financial, service credits or something else. This section also lists redemption terms such as earn backs—a provision that enables providers to regain service credits by meeting or exceeding standard service levels for a defined period.

An indemnification clause is a component of SLA agreements that protects the customer by shifting risk from the customer to the service provider. An indemnification clause is a provision in which the service provider agrees to indemnify—compensate for harm—the customer for any third-party litigation costs, losses or damages that result from a breach of service warranties. Such provisions are not always present in agreements, particularly standardized SLA templates, but customers can seek to add them with the help of legal counsel.

Vendor capabilities, workloads and customer requirements evolve over time. Accordingly, there should be an established process and timetable for reviewing and revising the agreed-upon terms and the KPIs used to measure performance. This review allows the SLA to incorporate the most recent features of the provider’s product or service and address current customer needs.

The agreement should include a section that outlines the circumstances that allow for the cancellation of the service agreement before its expiration date, and the notice period required by each party if such action is pursued.

The agreement is signed by authorized stakeholders on each side, binding all parties involved to the terms of the agreement while it is in effect.

SLAs are the agreements made between provider and customer that specify agreed-upon service standards. KPIs are the measures used by the provider to gauge performance against these targets and enable teams to make continuous improvements. KPIs are designed to simplify the evaluation process and give teams an accurate idea of how they are performing toward any stated objective.

For example, if an organization has made certain guarantees around the  cybersecurity  of their offering, they might track KPIs like number of security incidents over a given period of time, intrusion attempts and the success rates of intrusion detection or prevention systems, cost per incident or vendor security rating.

Service level objectives (SLOs) are a part of SLAs that set performance baselines for a specific aspect of service, such as error rates, request latency or uptime. Performance metrics and KPIs are used to evaluate the quality of service provided and determine if the service provider is meeting the terms of the SLA. 

Monitoring the appropriate metrics is an important part of an SLA’s success. Without the right data, it is difficult to know how the arrangement is serving either party. And tracking too many metrics can create an indecipherable mess. Different services will require the tracking of different metrics, however common SLA metrics include:

Uptime is the amount of time that services are working properly and available for use. This metric is usually given as a percentage over a period of time, say, 99.5% per 30 days (3.6 hours of downtime). Uptime requirements will vary by business type, and the SLA will reflect that.

For instance, 3.6 hours of downtime per month may be way too much for an e-commerce platform doing business globally. Such a company might need to be guaranteed more availability and would seek an SLA to reflect that.

Error rates is a measurement that tracks production or service failure and the percentage of time that an IT service provider's service level falls below expected performance targets. The agreement might include SLOs for missed deadlines, delays in feature or update releases, negative help desk interactions, coding error rates, defect rates and other measures of technical quality.

Response time establishes the acceptable amount of time for a provider to log and respond to a client issue or request.

The resolution time establishes the acceptable amount of time for an issue to be resolved once it has been logged by the provider.

This metric is the average time it takes to recover a product, service or system after a failure or outage.

This metric is a measure of the percentage of customers who have their issue resolved by the provider during their first interaction with the service desk or chat bot.

This is a key metric for customer service providers or organizations that have a customer service component. This is the rate at which customers abandoned their customer support inquiry before they received an answer from the help desk.

A variety of security measures might be measured, such as undisclosed vulnerabilities, antivirus updates or software patches, to evaluate a provider’s commitment to IT security.

By using the appropriate metrics and KPIs, organizations can determine how a provider’s services or products are contributing to broader business goals. For example, a company undergoing a digital transformation might ask: are the provider’s cloud resourcing tools helping us bring our cloud computing spend back under control? Tracking the right data will help answer that question.

SLAs yield benefits for both the service provider and the customer. SLAs help to:

In creating SLAs, organizations have an opportunity to closely examine their products, services and processes—and associated customer experiences—to determine what’s working well and what can be improved upon. An SLA establishes clear performance goals that provide benchmarks for measuring performance and customer experience success.

SLAs clarify the roles and responsibilities of all stakeholders, as well as processes and channels for troubleshooting issues and handling disputes. This clarity helps eliminate confusion and promote clear communication both internally and with external clients.

SLAs define expectations around service availability, set policies for downtime and lay out procedures for failure and disaster recovery. These measures help to minimize disruptions and unexpected downtime, and quickly resolve technical issues and service outages. Once satisfactory processes are in place, organizations can leverage automation to enhance service consistency.  

The SLA process offers an opportunity to be proactive with risk management . The process identifies potential risks and threats ahead of time, and it helps business stakeholders develop plans to avoid or mitigate such issues. Organizations can improve service delivery and response times, create stronger contingency plans and bolster their overall risk management strategy.

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What is an sla learn best practices and how to write one.

SLAs (service level agreements) are notoriously difficult to measure, report on, and meet. They can also be difficult to configure and change in many service desks. Still, it’s important to track your performance against top objectives, and SLAs provide a great opportunity to improve customer satisfaction.

What is a service level agreement (SLA)?

As a service provider, a service level agreement is a plain-language agreement between you and your customer (whether internal or external) that defines the services you will deliver, the responsiveness that can be expected, and how you will measure performance. 

SLAs define contractually agreed upon terms for services including things like uptime and support responsiveness. For instance, promising customers 99.9% service uptime or a response from support within 24 hours. In addition to formalizing service expectations, SLAs set forth the terms for redress when requirements are breached.

Why an SLA matters

SLAs are a foundational agreement between your IT team and customers that are important in building trust. They manage customer expectations and allow your team to know which issues you are responsible for resolving.With SLAs in place, there is mutual understanding of service expectations. Implementing SLAs can benefit your IT team in numerous ways that include:  

• Strengthening IT’s relationship with customers - SLAs ease the concern over risk, which improves trust between parties. By defining what happens in the event of a breach, they reduce uncertainty. 
• Formalizing communication - Conversations with stakeholders about IT issues can be difficult. Nobody wants to be hearing from a customer ten times a day or,on the other hand, allowing a customer to quietly stew over their unspoken expectations for service performance. An SLA enables stakeholders to have structured conversations based on already agreed-upon terms. 
• Improving productivity and morale - SLAs define the urgency of incoming requests. They focus IT teams on which incoming issues matter the most.

The difference between an SLA and a KPI

An SLA is an agreement between you and your customer that defines how your relationship will work in the future. Key performance indicators (KPIs) are the metrics chosen to gauge how well a team performed against agreed standards.

An IT service desk, for example, typically agrees to provide technical support for a wide variety of services and devices within the business, and offers guarantees around things like uptime, first-call resolution, and time-to-recovery after service outages. KPIs are the specific metrics that are chosen to track whether the IT service desk fulfills these guarantees.

SLA challenges

This all sounds simple, right? In theory, yes. In practice, though, IT teams often run into one or more major challenges:

• Tracking SLAs is difficult, and changing them is even harder . To see how they’re performing against SLA, many IT managers have to extract a ton of raw data, write custom queries, and build elaborate Excel formulas and reports. Plus, the SLAs often have to be custom or hard-coded into many service desks, meaning it can take days of development effort to change them.
• SLAs don’t always align with business priorities . SLAs seldom seem to change or evolve at the same pace the business does. In fact, more often than not, they’re inherited. Someone set an SLA a decade ago, and today it’s honored simply because it’s there. 
• There is little flexibility in reporting . Even though there are a ton of unique circumstances influencing SLA attainment (like how long it takes for a customer to reply to you, etc.) most SLA reports don’t easily account for them. You either met your SLA or you didn’t. There’s no way to highlight something in a report that shows why, or helps you continually improve.

How to set an SLA and measure your performance

Above, we talked about how SLAs can feel a bit arbitrary and like you’re not always measuring things that directly support your company’s bigger business objectives. To make sure you’re measuring the right things, and meeting the expectations that other parts of the business have of you, we recommend revisiting your SLAs regularly. Follow this process:

• Set a baseline. The best place to start is by looking at your current SLAs, and how you’re performing against them. Take an inventory of what you offer, and how it aligns to the business goals of your company and your customers.
• Ask how you’re doing. Talk directly with your customers and solicit constructive feedback. What are you doing well, and what could you do better? Are you offering the right services?
• Build a draft of new SLAs based on the results of the steps above. Get rid of the services you no longer need, and add the ones that will make customers even happier and bring more value to both the business and IT.
• Get support from management. To be successful, SLAs need the blessing of your IT leaders, and the leaders of your customer organizations, too. Start by getting your own management to buy in, and then ask them to help you negotiate with your customer’s management team.

If you've followed the above process, your SLAs should be in pretty good shape.

SLA best practices

Once you’ve brokered the best SLAs for your current business and customer needs, you’re ready to implement them. Here are some tips for taking SLAs to a whole new level of ease and effectiveness.

Create an SLA that stops tracking time to resolution while you’re waiting for a customer to reply

IT departments need to be able to measure their own response times effectively in order to provide the best possible service. Still, measuring SLAs gets complicated quickly as slow-responding customers and third party escalations cause response times to look far worse than they may actually be. Make sure your measurement and reporting systems can accommodate exceptions like these, so the service desk team is tracked based on how they are actually performing.

Remember the agent experience

Use simple, clear naming conventions. Agents should be able to read the name of the SLA and quickly understand what they’re being measured on. It’s also important to resist the urge to create too many goals. Agents should be able to clearly understand what their goals are, without too many special situations. The more goals you create, and the more variables you introduce into each goal, the harder they become to understand and adhere to.

Break up large, complex SLAs

Rather than creating complex SLAs use a series of smaller ones, so you can measure and report on the individual pieces of your workflow, not just the entire pie. This also makes it easier to update your SLAs and keep them current.

Set different performance goals based on ticket priority levels

On an average day, your service desk team won’t consider a printer failure its highest priority ticket. But the CEO’s printer? That’s another story. In practice, IT teams prioritize tickets in a ton of different ways: from which parts of the business are being affected to who opened the ticket to even more complex combinations (like an outage of the sales booking system at the end of the quarter).

You need flexibility from your service desk software so you can create SLA performance goals based on just about any combination of parameters you define. It’s important to be able to change or edit them easily to keep your team’s priorities completely aligned with changing business needs.

Keep some SLAs running 24/7, and restrict others to normal business hours

If your service desk team works Monday to Friday during normal business hours, you can't provide true 24 x 7 support for every service you offer. Even with on-call service desk teams and customers that pay for priority support, you will still often have some services that warrant weekday responses, and some that warrant instant attention, no matter what time of day or night.

Configure your service desk to stop the clock from ticking on Saturdays and Sundays, and get even more complex if you want to create customized rules for things like company holidays. And, considering creating calendars to support teams based in different locations.

If you’re looking for service desk software that makes it easy to set SLAs that align with your business goals, give Jira Service Management a try for free.

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What Is An SLA? Types, How to Write One, and Examples

May 17, 2024

Why is SLA important?

What are the three types of slas, service level agreement components, how to write an sla.

• Challenges of an SLA

Marketing opportunity in SLAs

Service providers have long struggled with the ever-changing rules of service level agreements.

Whether it’s field service companies like plumbing and heating, fire and security, maintenance businesses or managed IT service providers , they’ve all had to deal with an SLA at one point or another. However, most of the confusion stems from a few questions which we’ll deal with in a second.

Keep on reading to find out more about what service level agreements are, what you need to know about SLAs as a provider, the biggest challenges in SLAs, and the marketing opportunity you have with SLAs.

What is an SLA?

An SLA or service level agreement refers to a certain type of contract between a customer (be it an individual or a company) and a service provider. Their purpose is to define the type of service and the standard to which said service will be provided, as per the agreed terms between the two parties featured in the contract.

An easy example would be to look around your own office building. You should be able to see a few smoke alarms, fire extinguishers, and emergency exit signs. Before starting work, they’ve most likely reviewed and signed a fire and security service-level agreement with the facilities management department, in addition to a contract of employment.

The SLA describes how they’re under obligation to check the installation on a yearly or quarterly basis. In the case of a malfunction, it’s their responsibility to fix any issue in an agreed amount of time. 

A service level agreement or SLA is used in different industries, including technology, because of the several benefits it offers to vendors, companies, and teams. An SLA is important because it:

• Sets clear expectations along with service terms and conditions that prevent future misunderstandings between customers and service providers. 
• Provides quality assurance  by defining quality standards a service provider must meet.
• Outlines remedies  which can be helpful while addressing events like data loss , downtime, and service disruptions. 
• Facilitates continuous improvement  by letting service providers and organizations share feedback and improve opportunities with each other.

Both an organization and a service provider must take part in the SLA draft creation process to fully realize the benefits of an SLA.

There is a simple reason why service level agreements are not included in a standard contract of employment for most service providers. Making changes to a contract that’s already been signed can be a costly affair. Not to mention time-consuming.

What's the difference between SLAs and contracts?  A contract is designed to last for a year or more while SLAs are built to be revised on a regular basis depending on the type of service and the listed requirements. The contract can then refer simply to the agreed SLA and still be legally binding.

Everyone has a different idea about what good service looks like but an SLA makes the voice of the customer ring loud and clear: that’s the quality standard they expect. Despite the flexibility it affords both parties to negotiate rights and responsibilities, breaching a service level agreement has similar consequences to breaching a contract. This is why it’s vital that service providers pay just as much attention to keeping their SLA compliance up-to-date. 

You'll come across three types of SLAs: customer, internal and multi-level service-level agreements.

• A  customer service level agreement  or  customer-based SLA  outlines the services a service provider will provide to an internal or external customer. This is also known as external service agreement and created only after negotiation between a service provider and a customer.  A customer SLA contains expected service details, service availability provisions, responsibilities of both parties, escalation matrix, cancellation terms, and penalties in case of inability to meet SLA metrics.  For example, a business onboarding an accounting tool may negotiate to align on expectations and service level details. 
• An  internal SLA  refers to the service level agreement between an organization and its internal customers. For example, the revenue department in your company may create an internal service level agreement with the marketing department to align on expected operational performance and return on investment (ROI).
• A  multi-level SLA  creates different levels of service agreements to cater to different levels of customers. For example, a software as a service (SaaS) company may create different SLA levels based on the pricing ranges they charge for different subscription tiers. 

Service level agreement components vary depending on types of services, industries, and vendors. Below are the most common components that you'll come across in an SLA.

• Agreement overview is the first section of an SLA. It introduces both parties, shares details of services to be provided, and the start date.
• Stakeholders   refer to the section that clearly define the details of parties involved in an SLA and their responsibilities.
• Service description , or description of services, describes the details of every service along with turnaround times. This section also sheds light on how a service provider delivers services, their operation hours, dependency locations, processes, and technologies. A service also must add whether they will offer maintenance services.
• Service performance  defines the performance measurement levels and metrics an organization will use to measure the service levels of services provided. A service provider and an organization must agree on this list of levels and metrics before adding them to an SLA.
• Service exclusions specify the services a service provider doesn't offer as part of their services. This section is crucial as it helps organizations avoid confusion in the future.
• Service tracking and reporting  section shares the SLA reporting structure, agreement stakeholders, and service tracking intervals.
• Redressing  outlines the payment or compensation a customer should receive in case a service provider is unable to fully meet the obligations set in an SLA.
• Security  lays out all security measures, including data security , IT security, and nondisclosure agreements, a service provider will use while fulfilling its obligations.
• Risk management and disaster recovery   shares processes and practices a service provider will follow during the active duration of an SLA.
• Periodic process review  defines the key performance indicators both parties will regularly review before making any necessary changes to the SLA.
• Termination  lays out the circumstances under which either party can terminate an SLA. Both parties are required to share a notice period after which they may terminate the SLA.
• Signatures  require authorized stakeholders from both parties to sign the SLA document, which is indicative of their approval of the service level agreement.

Writing an SLA involves five stages: defining the scope of service, verifying service levels, setting performance metrics, preparing the SLA document, and reviewing SLA with all relevant stakeholders. 

1. Define the scope of service

This stage involves defining the service clearly to include:

• Details of stakeholders
• Points of contacts along with their designations
• Details of services provided by the service provider
• Service exclusions 
• Customer obligations including payment frequency
• Vendor obligations including vendor service responsibilities
• SLA termination clauses outlining when either party can terminate the SLA

2. Check service levels

Service levels refer to the service output using measurable terms, which may vary and look different depending on the services a service provider is offering. For example, a call center may define service level as the number of calls they answer, whereas a product manufacturing unit may define their service level in terms of numbers of units they produce every day. Consider working with stakeholders from both sides to verify service deliverables and their deadlines. 

3. Define service performance metrics

Service performance metrics refer to key indicators companies use to measure the efficiency of a service provided by a service provider. These metrics allow companies to evaluate whether the service provider is meeting mutually agreed upon SLA management metrics. 

4. Prepare the SLA document

Now, it's time to prepare the SLA document using the data you collected using the first three stages.

5. Review the service level agreement

This stage involves inviting all stakeholders for the purpose of reviewing the SLA you created and gathering feedback from them. Once stakeholders of both parties agree to the document terms and conditions, you can gather final signatures and distribute the SLA document. 

SLA examples:

• Google Workspace SLA
• Microsoft Online Services' uptime and connectivity SLA

Challenge of an SLA

In one word? Scheduling. Sounds like a no-brainer. After all, what could be easier than setting up a few appointments in a Google calendar. Well, if you’re a service provider of any kind and particularly if you’re one in the field service industry, you’ll know how hectic things can get. More often than not, companies have to juggle multiple SLAs and deal with both proactive and reactive work.

Proactive (or preventive) work would be that installation inspection we mentioned in our first example, where the service provider knows they have to comply with a regular check-up. Reactive work is the emergency kind, where the provider needs to fit an appointment in their schedule within a certain timeframe.

Most SLAs have clauses that dictate ‘asset downtime’ meaning how long an asset can be nonfunctional. Imagine your IT provider didn’t comply with their service level agreement and did nothing to fix your internet security issue for a week or more. Same with a fire alarm system. The consequences of SLA breaches can be serious for both parties.

Scheduling SLA appointments used to be a challenging task, involving multiple calendars and spreadsheets but nowadays there are planned preventive maintenance software that can help fast-forward the task. 

Just make sure your digital tool has these features: 

• Customization. Admins might want to use SLA features outside of contracts or even add additional criteria to appointments. It’s important to be able to set notifications according to necessity rather than being limited by the software.
• Countdowns. SLA information should be easy to find and understand even in busy situations. A countdown showing how much time is left before the SLA is breached will help operation managers and office admins plan accordingly.
• Reporting. Analytics are the bread and butter of any good manager these days, regardless of industry. Accurate SLA monitoring and history will help companies understand what works, what doesn’t and how to improve in the future.

Working under the assumption that the software you choose has the aforementioned features, there is a clear opportunity to improve one’s business reputation with the use of SLAs. It’s a great example of niche marketing that works. True success for a field service company or any other service provider resides with commercial contracts. These guarantee that your business will have a constant cash flow and won’t be subject to market fluctuations as much as a company dealing only with individual customers.

Everything sounds good enough but the truth of the matter is that commercial contracts don’t come easy. And they definitely don’t go to disorganized businesses. Service-level agreements are a given and they’ll come with tough consequences for any breach. 

For example, no commercial property can afford to go without electricity for any period of time without upsetting their own customers, employees, and run afoul of safety legislation. This means that commercial customers will look for tangible proof that your business can handle the pressure.

You can always use past service level agreements to further your brand. With the help of analytics, you can build reports to show that you have a 99% (maybe it’s even 100%!) uphold rate and demonstrate a successful track record. 

Office automation always has a nice ring to it when it comes to writing proposals. You’ll find that surprisingly few service providers of any kind can boast about transparency and guarantee that they have scheduling protocols in place beyond just a promise that they won’t be late. 

It’s key that you add reports based on your scheduling track record to the proposals you submit when you’re tendering for a big contract. Simply saying that you’ve successful upheld every SLA in the past won’t cover it.

You need to be exact and provide the prospective customers with hard data in a way that it’s easy to understand. They’ll be much more open to trust a business that can project this information in a professional manner and have proof to back it up than another provider who comes in with a handwritten stack of papers and the occasional coffee mug ring.

Final words

All in all, service level agreements are intimidating only when they’ve not been understood correctly. By following these few steps, you can use them to the advantage of your business and win bigger customers! 

Explore the best IT service management tools that help you execute, plan, and manage IT service delivery. 

This article was originally published in 2019. It has been updated with new information.

Cristina Maria is a Marketing Executive at Commusoft , a job management software company, where she helps field service businesses discover the potential of digital solutions. A curious hybrid writer and marketer, you'll usually find Cristina doing what she loves most: using her work experience to produce engaging content for those looking to make the most out of their business strategies. An Asimov fan since childhood, she gets much too fired up whenever the topic of AI comes into discussion.

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How to write your first service level agreement (with tips from Slack, Amazon, and Google)

So, you're writing your first service level agreement? Learn from the best: examples from Slack, Amazon, and Google show how you can write your SLA for comprehension and effectiveness.

When you pay a lot of money for something, you have certain expectations about how it works. If you walked into a car dealership and drove out with a new ride, you’d assume the vehicle would drive problem-free (at least for a while). Most likely, you would even get a warranty from the dealership that outlined which repairs and maintenance they’d cover in the first few years of ownership. In the tech industry, that warranty agreement between a seller of something—software, instead of a car—and a customer is called a service level agreement (SLA). An SLA is a contract between a service provider and a service user that defines what service is provided, as well as expectations around issues and downtime. As an early-stage founder, writing an SLA is one of those tasks that’s uber-important but also uber-outside your forte. It needs to be done, and as the person with the most product expertise and customer visibility, it falls to you. And yet, this is very much not one of those cases where you can throw spaghetti at the wall, see if it sticks, and iterate. This is a contract. You can’t move fast and break things when it comes to contracts. That’s why we took a deep dive into what makes a good SLA—so you don’t have to. We’ve pored over the best examples our industry has to offer, from companies like Slack, Google, and Amazon, and emerged with a model any company can use to write their SLA.

‍ Steal this service level agreement template. A good SLA will use simple language to define a set of components around service performance. In a way, an SLA can act as a DIY problem-solver and instruction manual for your customers. The idea is to tell your customers four things:

• What they can expect around functionality from your service
• How the service will be monitored
• A plan of action in case something goes wrong
• Steps for remediation

Define the level of service functionality your customer can expect

Define the type of service up top. This section will help to get both you and your customers on the same page around the type of service you’re providing. It will also provide an estimated performance level, which is usually given in the form of a percentage (like 99.5% uptime).

Lay out metrics for monitoring your service

Next, tell the customer how you will monitor performance and where they can view the monitoring information. If your customers use a lot of third-party apps in addition to yours, it can be difficult for them to pinpoint where the exact issue is if one of the apps goes down. In 2020 when AWS had an outage —tons of websites were down. Having a status page for your app and telling your customers where to view it will help them quickly see when there is a problem.

Offer an escalation for resolving issues

Now, tell your customers what to do in case of any problems. Is your app experiencing an outage? Give them an email address, a help-desk phone number, a shared Slack channel, or a contact form where they can get more information. Once the problem is resolved, you’ll be able to tell them before the status bar on your monitoring site changes. Remember, the key to happy customers is great communication.

Provide remediation if an issue arises

Finally, as much as your engineers are rock stars or wizards or whatever recruiting is calling them these days, they’re still just a bunch of humans. Sometimes, technical problems happen, and they can take a little bit of time to resolve. In your SLA, be sure to give a response-time window, where the customer can expect issues to be looked into and resolved. This might sound impossible, but do your best. You can also spell out clear, actionable ways customers can escalate if a problem persists outside of the agreed-upon window, such as applying for refunds for lost time. Now that we have a clear understanding of the parts of a great SLA, let’s look at some examples from Slack, Google, and Amazon.

Slack’s SLA has both a summary and details

The Slack SLA includes a two-sentence summary of the document at the top that makes understanding the terms of the agreement really simple. If end users wanted to, they could probably get by with reading only those first two sentences. Learn from Slack: Make mutual understanding as easy as possible. Below the summary, Slack’s SLA provides concrete details that the customer can read for more information:

Including a summary at the top with the most important details, like percentage of expected uptime and a short explanation of service credits (with a link to the details in the doc), means your customers can find info quickly and will have to dig through details only if they really need to. In the SLA breakdown, Slack clearly labels each section to help end users find what they’re looking for quickly (and, hey, it seems to follow our suggested outline pretty well!):

• Downtime: Definition of what “downtime” means for Slack
• Uptime commitment: Numerical percentage of uptime guarantee
• Scheduled downtime: Clear boundaries on scheduled downtime, including advanced warning and total outage time in a year
• Service credits: Promises to the customer if Slack fails to meet their SLA terms
• Updates (to SLA): Legally, Slack is saying they can update their SLA whenever they want

Most sections are just a few sentences and/or have bullet points to convey details without too much fluff. After all, your customers are tech people, not lawyers. Basically, we love Slack’s SLA because it keeps it simple, with links to more documentation for deeper dives, which helps keep this page strictly for important info.

Google’s Cloud Functions SLA defines terms

Google’s Cloud Functions SLA has a section dedicated to defining all the technical and legal terms they use in their agreement to make sure customers understand all conditions. Often, SLAs need to include very technical terms or legal jargon. To make the job of the reader as easy as possible, why not include some definitions right at the top so readers can refer back when they hit a word or phrase they don’t know? That’s exactly what Google does:

Each defined term is bolded, which is extra helpful if a reader sees something confusing and wants to go back and look for the definition. Defining the terms within the same doc is critical. If your customer is looking up “downtime period” in a random internet search, they may find a completely different definition than the one you have. Better to ensure you’re all clearly talking about the same definitions. Google uses a table to define “Financial Credit” because that’s the clearest way to show the information, and that’s more than okay! It may seem counterintuitive to include a spreadsheet or table in your legal docs, but it’s actually pretty normal.

We love Google’s Cloud Functions SLA because it really excels at spelling out exactly what Google intends to convey to the reader and gives them great resources for understanding everything in the SLA doc.

Amazon’s S3 SLA outlines service credits with tables

Amazon’s S3 SLA uses tables to help the reader understand service credits to their account, which awards a service-credit percentage based on the monthly uptime percentage. Remember how we said tables were normal for SLA docs? We weren’t kidding!

Writing this information out in long-form sentences would be very confusing for the reader. “If your monthly uptime percentage is less than 99.9% but greater than or equal to 99.0%, your service credit percentage will be 10%. If your monthly uptime percentage is less than 99.0% but greater than or equal to 95.0%, your service . . .” Yeah—that’s no good. Seeing this information laid out in a table makes it much easier to understand. Terms for the service credit are listed below the table and include rules (for instance, you can’t transfer credit to another account).

Write a service level agreement that makes you and your customers happy

An SLA is more than just a legal document. An SLA is a promise about quality of service to your customers. Writing an SLA that’s clear, simple, and easy to use is key for keeping your customers happy. Companies like Slack, Google, and Amazon have written SLAs that work well for their customers by keeping it simple, defining confusing terms, and displaying information in an easy-to-digest manner.

An SLA is just one step toward becoming Enterprise Ready

You’ve built the app. You’ve gotten your first customers. You have traction and—dare we say it?—product-market fit. But that’s not all you need. Before you can move upmarket, before your business can mature, your app needs to become Enterprise Ready . Take a look at Callingly , a sales enablement platform that optimizes how businesses connect new leads to available sales team agents. Callingly lost an RFP from a large company partially because it lacked single sign-on (SSO) . But for a small, sub-50-person company, SSO seemed out of reach. They estimated it would take 120 precious developer hours to implement. With WorkOS, Callingly implemented SSO in only a few hours, and after announcing SSO, they had their first enterprise customer using it in only 48 hours. Is your app Enterprise Ready?

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What Is a Service-Level Agreement? (Example & Templates Included)

A service level agreement, often abbreviated as SLA, is used in IT and professional services to define what a vendor is expected to do. It’s part of the contract between any technology vendor and sets up what will be levied upon them if the agreement isn’t upheld.

First, let’s explore the definition of an SLA in greater detail, including the different types of service agreements and why they’re so important. Then we’ll outline what goes into an SLA so you can make one, with an example to flesh it out and make it more comprehensible.

What Is a Service Level Agreement (SLA)?

As noted, a service level agreement is used to define the level of service that a customer expects from a supplier. This definition includes metrics that will be used to measure the service and the remedies or penalties that will be incurred if those service levels aren’t reached.

Get your free

Service Level Agreement Template

Use this free Service Level Agreement Template for Word to manage your projects better.

It’s common to find a standard service level agreement from most service providers, though there can be various types, which we’ll get to shortly. Whichever SLA is used, it should be reviewed and modified by the customer and legal counsel as they skew in favor of the supplier.

Project management software can help you keep track of SLAs. ProjectManager is award-winning project management software that has customizable kanban boards to collect and track your service level agreements and ensure that they’re being followed. Our unlimited file storage means that you can attach the SLA to a task card and include all pertinent information in the description of that card, including assigning it to a team member responsible for ensuring that the vendor is keeping to the terms of the agreement. Get started with ProjectManager today for free.

Types of Service Level Agreements

There are three different types of service level agreements: customer, internal and multi-level. That’s because one user’s needs aren’t always the same as another’s. Therefore, to better understand what an SLA is, we’ll define the three types below.

Customer SLA

As the name suggests, this SLA is used for an individual customer and covers all the relevant services that the customer needs. It’ll consist of only one contract, which will have details on the type and quality of the service that’s agreed on. For example, that service could include voice, text and internet services, but there’s still only one contract.

Internal SLA

An internal SLA is when both parties know the responsibilities and duties of the other team, which creates a better understanding between different departments. This helps to avoid ambiguity surrounding each team’s expectations, roles, deliverables and more. This means that departments in a company can have an internal service-level agreement, such as marketing providing a certain number of leads to sales per month.

Multi-Level SLA

The multi-level service level agreement is one that’s split into different tiers. Each of those tiers will address a subset of customers or departments in a company. They cover all relevant aspects of the agreement, including expectations for each party when there are multiple vendors or users. So a multi-level SLA could have a section for all customers and another for customers who have a specific subscription.

Why Is It Important to Write a Service Level Agreement?

The importance of a service level agreement is that it clearly defines the commitments between the service provider and the customer. These SLAs are very common in telecommunications, an industry that needs a guarantee of certain standards being upheld.

The supplier will also find the service level agreement important as it offers them a detailed framework of expectations. Therefore, they know what to do and can be protected if a client demands something unreasonable.

That’s because the service level agreement outlines obligations between the service supplier and the customers. It stipulates that a mutually agreed set of quality standards will be followed for the services provided. They also allow for contingencies and compensation when those service standards aren’t met.

What Should Be Included in a Service Level Agreement?

When you’re writing a service level agreement, there are various necessary components in order for it to cover all the bases and provide the client with what they need, while making sure the service provider is protected from going beyond what’s expected. The following is a list of those essential elements to consider when writing a service-level agreement.

Description of the Service

The type of service that’s being provided needs to be clearly specified, including the functions and any other pertinent information. This section will define the scope of service and the expected performance and quality of the work. This should be thorough so that all parties are clear on what’s being offered, how it’s delivered and what’s expected.

Payment Terms

This section is a contractually binding agreement between the service provider and client that ensures that the agreed-upon services are performed and paid for at the agreed price. This is a figure that’s been agreed upon by both parties and verifies the legal rights and obligations of the parties involved.

Service Levels

Here is where the SLA defines the desired performance level, reliability and responsiveness. That means the service shouldn’t exceed minimum disruption over time and is available when needed. The service will perform the actions it’s delivering promptly when customers request it.

Services That Won’t Be Included in the SLA

This can include SLA exclusions, which are one-time instances where the service level agreement isn’t in effect, such as server maintenance or upgrades. It will also outline services that don’t fall under the provider’s responsibility to further clarify for both parties what is and isn’t expected of the provider.

Service Level Agreement Metrics

It’s important that there is monitoring and reporting of the service level to ensure that it is being delivered as contracted. Here, supervision and monitoring are described, including the gathering of different types of statistics, the frequency those statistics are gathered and how the customer will be able to access them.

Conditions for SLA Cancellation

If the provider is unable to meet the requirements of the SLA, there will be consequences. Those consequences will be outlined in this section, such as the customer’s right to terminate the contract or seek a refund for losses incurred by the failure of service.

Indemnification Clauses

The indemnification clause is used to compensate a party for loss that’s caused by the other party’s actions or failure to perform. Unlike the above cancellation clause, this one is to protect against damages that result from defects in the service purchased.

Service Level Agreement Example

Let’s take a moment to look at how a service-level agreement would work in a real-life situation. Let’s look at a call center. They might have a service level agreement that defines the number of calls they answer in an hour. But a bakery could also have an SLA that defines the number of baked goods that they can deliver to a client each day.

The IT industry uses service-level agreements most for everything from cloud computing to network management and database management services. But you’ll also find SLAs in customer service, healthcare, logistics and education.

This free service level agreement (SLA) template for Word has the basic elements any SLA should have including service standards, termination terms, payment terms and more. The best part is that it can be easily customized to add or remove any sections that might be needed.

More Service Level Agreement Templates

The following are some examples of service-level agreement templates from a variety of sources that you can use to get started when partnering with a service provider or customer. These outlines will make sure that you’ve not left anything out that is essential to legally protect both parties and ensure that the services are rendered as defined by the contract.

• Service Level Agreement Template by Slatemplate.com.
• Service Level Agreement Template by Columbia University
• Service Level Agreement Template by PandaDoc
• Service Level Agreement Template by RocketLawyer
• Service Level Agreement Template by Template.net

How ProjectManager Helps Service Providers

Once you have a service level agreement you’ll want to keep track of it to make sure that the services are being provided as determined by the contract. Project management software can help you monitor the SLA. ProjectManager is award-winning project management software that has unlimited file storage to keep multiple service-level agreements and have them easily accessible anywhere and at any time. Each can be tagged to make them easier to find and tracked over the course of their life cycle to ensure that services are rendered properly.

Use Reporting Tools to Track SLA Metrics

Once you’ve defined clear and measurable SLA metrics, you’ll need to create reporting and monitoring processes to track your SLA. Our customizable reporting features allow you to collect, analyze and report on SLA data, from costs to time and more, whether one service level agreement or many. We have status reports and portfolio reports, as well as other reports, all of which can be filtered to capture only the data you’re interested in. The reports can be shared in a variety of formats to keep your stakeholders informed.

Get a High-Level Overview With Live Dashboards

When you just want to get an overview of how your service level agreement is performing, toggle over to our real-time dashboard. It’ll automatically gather metrics and display them on easy-to-read graphs and charts. Users can view time, cost and other metrics to monitor the SLA whenever they want to, quickly and easily. Unlike lightweight alternatives, there’s no time-consuming setup required. Our dashboard is ready when you are.

Managing your service level agreements can be done on any of our multiple project views. We’ve already mentioned the kanban boards, but there are also Gantt charts, task lists, sheet and calendar views that allow you to work with the tools you’re comfortable with. There are also recurring tasks that can be set to remind you when SLAs are expired or need to be renewed so you never have to suffer a service disruption.

Related Service Management Content Managing the delivery of services is a complex task, but it doesn’t have to if you use the right tools. That’s why we’ve created dozens of blogs, templates and guides to help you master service management. Professional Services Work & Project Management Software” management software Field Service Management: Key Areas, Challenges & Tools What Is a Service-Level Agreement? (Example & Templates Included) ProjectManager is cloud-based project management software that connects teams whether they’re in the office, out in the field or anywhere else in the world. They can share files, comment at the task level and more to foster greater collaboration. Use our risk, task and resource management tools to better control your work. Get started with ProjectManager today for free. [rp4wp] Deliver your projects on time and on budget

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17 Service Level Agreement Examples to Track Your Service Management Metrics

In today’s business environment where managed services are constantly being outsourced, creating a concise, official document outlining the terms of an agreement between the client and service provider is critical to setting the foundations for a trustworthy and ultimately fruitful relationship.

“Service-level agreements, amongst other things, bolster trust in and between organizations – making it clear what needs to be done, to what standard, and when.” – Adam Henshall, What is an SLA? How to Use Service-Level Agreements for Success

It’s simply an essential component that requires care and attention.

As you may well have already noticed and perhaps even put to good use, Process Street has been creating some excellent content for those of you looking to create first-class service level agreement’s in quick and easy fashion.

For a comprehensive introduction into what an SLA is, exactly what one consists of and why you need them, have a read through the following article:

• What is an SLA? How to Use Service-Level Agreements for Success

If you are already familiar with the fundamentals of SLAs and are looking for guidance on how to create and edit one for your organization, you’ll find this post useful:

• Service Level Agreement Template: How to Create Solid SLAs at Super Speed

Bear in mind that the article referenced above also contains a free, easy-to-use Process Street template from which you can create as many service level agreements as you like.

And that’s what this post is all about – providing free, easy-to-use examples in the form of practical templates.

17 service level agreement examples: Addressing various use cases

Below you can access 17 different service level agreement checklist templates.

The idea behind their construction was to broaden the scope of our general SLA creation template to include management review and metric tracking processes that follow months or even years after the agreement has been put in place.

For example, 3 months after the agreement was set, the client may request that the terms of the agreement be changed slightly, or the service provider needs to iterate their objectives.

Or you simply want to conduct periodic reviews of the agreement to ensure that all requirements are being met.

“Any service provider you choose should be more than happy to create an SLA with you. However, having an SLA isn’t enough. Always remember to review the contract as your business grows or changes. Your needs may change over time and your SLA should always reflect your organization’s evolving needs.” – CloudCarib, 3 Reasons Why You Need to Have an SLA with Your Service Provider

That’s what these templates enable you to do with ease.

Furthermore, each example addresses a different industry/use case. These include IT services, social media services, call center services, and HR services.

So, before we get into a quick intro for each template, let me clarify what you’ll be looking at.

3 of the templates are what we refer to as “master” templates. The first is the Service Level Agreement Template Process – the checklist presented in January in the second article I linked to earlier in the post.

The second master template is the SLA Management Checklist Template , which is simply an extension of the first master, which includes additional tasks following the SLA’s creation to review the agreement once a month. This master branches out into 7 other templates that are customized for various use cases.

The third and final master template is the SLA Metrics Tracking Process Template , which is designed to conduct periodic reviews of a service level agreement to ensure that all requirements are being met by both parties, and evaluate if any changes need to be made moving forward. Like the second master, this template also sets the foundation for 7 other templates addressing different use cases.

Let’s dive in.

If you want to go straight to the checklists, there are quick links right below. Otherwise, scroll down for a brief intro to each one and to learn a little bit more about what makes Process Street’s checklists so powerful.

• Service Level Agreement Template Process  (Master # 1)
• SLA Management Checklist Template (Master #2)
• IT Service SLA Management Checklist Template
• Cloud Service SLA Management Checklist Template
• Social Media SLA Management Checklist Template
• Network Services SLA Management Checklist Template
• Managed Web Hosting SLA Management Checklist Template
• Call Center SLA Management Checklist Template
• HR Service SLA Management Checklist Template
• SLA Metrics Tracking Process Template (Master #3)
• IT Service SLA Metrics Tracking Process Template
• Cloud Service SLA Metrics Tracking Process Template
• Social Media SLA Metrics Tracking Process Template
• Network Services SLA Metrics Tracking Process Template
• Managed Web Hosting SLA Metrics Tracking Process Template
• Call Center SLA Metrics Tracking Process Template
• HR Services SLA Metrics Tracking Process Template

Our 17 service level agreement examples for complete SLA management

Service level agreement template process (master #1).

This is the general service level agreement creation process that we published back in January.

The template covers an SLA’s most important components, including:

• An agreement overview
• The agreement’s purpose, goal, and objectives
• The services being supplied and their scope
• Supplier and customer requirements and responsibilities
• A section regarding performance monitoring and reviews
• A section on service management
• Plus, in-built approval steps!

Once you’ve completed the checklist, you will have a clean, concise SLA emailed to the customer.

Click here to get the service level agreement template process. 

SLA management checklist template (Master #2)

This template is quite simply an extension of the general template linked above. The process does not end with the creation of the document but includes tasks for a 3-month review period.

The review process includes evaluating KPIs and other relevant metrics to ensure that performance is in compliance with the current SLA.

If it is not and adjustments need to be made, our conditional logic feature will kick in and present you with additional tasks to make the necessary iterations and inform the relevant personnel of the shortcoming and what needs to change moving forward.

Bear in mind that if you would like the review process to stretch further, let’s say for 1 year, then all you have to do is duplicate the review tasks for each month and make minor changes to reflect the time period.

Click here to get the SLA management checklist template

IT service SLA management checklist template

Based off the template above, this checklist is customized for IT services – one of, if not the most common use case when it comes to service level agreements.

Considering how much SLAs differ from company to company, as well as the broad scope of “IT services”, the level of customization has deliberately been kept low.

“SLAs are inherently broad; there are no hard-and-fast rules regarding what should and what should not go into an SLA. It could be all on one page, or it could be a whopping 100+ page document.” – Thom James Carter, Service Level Agreement Template: How to Create Solid SLAs at Super Speed

Nevertheless, if you are an IT services provider looking to create flawless SLAs in quick and easy fashion, the layout and terminology in this checklist will be what you are looking for.

Click here to get the IT services SLA management checklist template

Cloud service SLA management checklist template

A cloud service level agreement is essential for outlining the minimum level of service that needs to be maintained regarding response times to system failures, general data security and other deliverables that have been clearly defined in the SLA.

In other words, the document is there to establish a mutual understanding of the services, prioritized tasks, responsibilities, guarantees and warranties provided by the cloud service provider.

This checklist will enable you to outline these services, ensuring that all requirements are both specific and measurable, in order that they can be effectively reviewed down the line.

Click here to get the cloud service SLA management checklist template

Social media SLA management checklist template

If you are a social media services provider looking to help your customers engage with their target market and get the most out of our their social media accounts, an SLA will help you focus on the most important tasks by specifying what goals the customer wants to accomplish, and in what time span.

For example, the customer wants all tweets and Facebook messages to be responded to within 2 hours of receiving them. If you satisfy this requirement, then the customer is happy and you can easily prove that you are meeting the terms of the agreement.

This checklist will guide you through the SLA creation process and provide the tools to conduct monthly reviews of the SLA to make sure both the service provider and customer are satisfied with the way things are going.

Click here to get the social media SLA management checklist template

Network services SLA management checklist template

This undoubtedly falls under “IT services”, but we felt it deserved its own template because it is a massive use case within the IT industry, and a big one for service level agreements.

“One of the driving contractual issues within a telecommunications (Telco) service provider environment is the underpinning contract that specifies the Service Level Agreements (SLA). These are important because often there are claw-backs which the client can use to penalize the Telco or alternatively use it as a gauge to decide whether to move services elsewhere.” – Ronald Bartels, Network Service Level Agreement (SLA) management within a Telco

This checklist will help you make sure that you are clarifying what services you will be providing, as well as those that you will not be providing, and should not be expected by the customer.

Click here to get the network services SLA management checklist template

Managed web hosting SLA management checklist template

The purpose of a managed web hosting service level agreement is to ensure that the proper elements and commitments are in place to provide consistent support and maintenance for the client.

This is incredibly important because the level of support provided by the service provider can vary greatly.

“Especially in web hosting, the SLA includes all detailed information about the use and amount of the hosting resources. It also mentions the time period of service, response time and issue resolution time-frame. For example, if you call their support team about an issue and wait for a response. SLA will tell you how long this waiting period can be – ten seconds or ten minutes.” – Patricia Eldridge, The Importance of a Good Web Hosting Service Level Agreement (SLA) When Choosing a Hosting Service

As a web hosting service provider, run this checklist whenever you need to create a new SLA with a client. It will help you outline all services such as managed phone support, bug fixes, software and security updates, system backups, and whatever else is necessary.

Click here to get the managed web hosting SLA management checklist template

Call center SLA management checklist template

Service level agreements for call centers are nothing short of essential because there are numerous quantitative metrics like response time, on-hold time, and first call resolution (FCR) that clearly demonstrate the quality of service being provided.

Run through this checklist to determine all of the KPIs and other metrics that will be referred to when evaluating performance and show whether or not you as the service provider are meeting expectations.

Click here to get the call center SLA management checklist template

HR service SLA management checklist template

HR services vary greatly from the other use cases mentioned in this article in that the primary purpose of the services being provided is not related to IT.

Typically, HR services will include things like:

• Payroll administration
• Tax management
• Employee benefits (including health, medical and life insurance, 401(k) plans)
• Recruiting, hiring and firing

While the services being provided lean more towards qualitative than quantitative, there are still clear requirements and metrics that need to be laid out, and when done so properly lead to a number of benefits for the HR department and organization as a whole.

These benefits include an increase in HR productivity, efficient resource allocation, and perhaps most importantly, an uplift in employee experience.

“By providing HR with the means by which they can deliver faster response rates and greater case transparency to their employees along with the visibility they need to continually improve HR services, an SLA helps meet the expectations employees now have of their workplace technology.” – Kane Frisby, Top 5 Benefits of Service Level Agreements (SLA) in HR Service Delivery for 2020

To set the foundations for a well-oiled HR machine, use this checklist to create, share, and review SLAs with your customers or internally with your organization.

Click here to get the HR service SLA management checklist template

The next step: Service level agreement metrics tracking process

As I mentioned at the beginning of the post, the following 8 checklist templates are designed to conduct periodic reviews of service level agreements for the same use cases.

They assume that the SLA document has already been created and implemented, and are concerned with monitoring, reviewing, tracking metrics/KPIs, identifying and making any necessary iterations to ensure the relationship is maintained.

SLA metrics tracking process template (Master #3)

With this SLA metrics tracking process checklist, you will input relevant information in each task and conduct an effective review of performance.

This is the master checklist that is the foundation for the rest of the 7 templates that follow.

Components of the checklist include:

• Basic information about the companies involved
• The objective of the agreement
• Service provider and customer requirements
• Performance data and metrics
• Approval tasks to ensure SLA compliance
• Evaluation of SLA alignment with business goals
• Actionable insight from customer feedback
• Summary of overall performance
• Identification and implementation of any necessary changes to the SLA

This checklist is suitable for both service providers customers. Our conditional logic feature will customize the checklist depending on which one you are.

A specific example of how conditional logic will work is if you are the service provider, then there will be additional tasks concerned with gathering customer feedback and identifying actionable insights to improve service delivery. Of course, if you are the customer, this would not be relevant.

A second example is if you have identified that changes need to be made to the SLA, additional tasks will appear guiding you through the process of communicating with the relevant personnel, confirming that the updates have been made, and gaining approval from senior management.

Click here to get the SLA metrics tracking process template

IT service SLA metrics tracking process template

There is no getting around the fact that SLAs are difficult to track.

“To see how they’re performing against SLA, many IT managers have to extract a ton of raw data, write custom queries, and build elaborate Excel formulas and reports.” – Atlassian, How to set, measure and report on SLAs

Nevertheless, this doesn’t mean its impossible, and definitely should not be ignored if you are looking to maintain a long-term relationship with your customer or service provider.

There are also ways the process can be simplified, without having to “build elaborate Excel reports”.

The first and most important step is to set a baseline.

“Take an inventory of what you offer, and how it aligns to the business goals of your company and your customers.” – Atlassian, How to set, measure and report on SLAs

Then you can effectively evaluate whether or not current performance is meeting the requirements stated in the agreement, and determine if any changes need to be made.

That’s what this checklist enables you to do.

First, you gather all of the important performance data, conduct a thorough review, and make any necessary adjustments, ensuring that you are communicating clearly with the other party throughout the process.

Click here to get the IT service SLA metrics tracking process template

Cloud service SLA metrics tracking process template

As organizations are moving their systems, applications and data to the cloud, service level agreements have become increasingly important.

Without conducting frequent reviews, however, their relevance and impact on performance diminish greatly.

The cadence of reviews should be clearly outlined in the agreement. Without this conducting effective reviews will always be an uphill battle that will inevitably result in communication breakdowns and jeopardize the relationship.

“Most SLAs are negotiated to meet the needs of the customer at the time of signing, but many businesses change dramatically in size over time. A solid cloud service-level agreement outlines intervals for reviewing a contract so that it meets the changing needs of an organization.”  – Bridget Botelho – Don’t get hoodwinked by cloud SLA promises

Assuming that the timing and method of review processes is agreed upon between the customer and service provider, this checklist will enable you to conduct the review in an efficient manner.

Click here to get the cloud service SLA metrics tracking process template

Social media SLA metrics tracking process template

Evaluating SLA metrics for social media performance is relatively simple because almost all data is quantitative and has a very narrow scope (social media platforms like Twitter and Facebook).

For example, one of the most basic and important methods of assessing a company’s social media customer service is the customer satisfaction score; a rating from typically 1-5 that the customer gives after an issue is resolved via a social media platform.

These scores need to be collected and can then be entered into this checklist so they can be compared against the requirements that were laid out in the SLA.

Other performance data like average response times and net promoter scores (NPS) should be gathered in the checklist so they can be evaluated.

Click here to get the social media SLA metrics tracking process template

Network services SLA metrics tracking process template

These metrics depend on exactly what kind of network services are being provided.

“There are a large number of metrics that exist within Information Technology (IT). In a Telco the important are mostly Mean Time to Respond, Mean Time to Repair and Availability. The norm in a Tier 1 Telco is 20 minutes to respond, 4 hours to repair and 99% availability.” – Ronald Bartels, Network Service Level Agreement (SLA) management within a Telco

One of the essential metrics to determine for network services is the time when a client should be contacted when a link outage has been detected. The metric that follows is the time before when the outage should be resolved.

Whether you are the network service provider or the customer, run this checklist periodically, ideally once a month, to ensure that your requirements are being met and that the SLA is still in line with your business objectives.

Click here to get the network services SLA metrics tracking process template

Managed web hosting SLA metrics tracking process template

The KPIs and metrics for managed web hosting are very similar to those that apply to network services that I briefly went through for the previous template.

As the service provider, you want to make sure that you are receiving payment for all support costs at the agreed intervals. You also want to verify that a client representative is available when resolving a service-related incident or request.

As the customer on the other hand, you want to make sure that phone and email support are being provided as was agreed upon in the service level agreement. Other services like regular backups of your website, bug fixes, and security testing need to be evaluated to ensure SLA compliance.

Whichever side of the relationship you are on, enter the relevant information in this checklist and move forward knowing that you and the other party are on the same page.

Click here to get the managed web hosting SLA metrics tracking process template

Call center SLA metrics tracking process template

There are numerous metrics that apply to call center services, and frequently reviewing them is a must-do to continuously improve service delivery.

“In the customer service industry, businesses must track and improve the essential call center metrics to understand where the business is heading to and what action plan is required to achieve better results.” – Jasmina Aneja, 15 Essential Call Center Metrics Your Business Must Measure 

A few examples of important call center metrics include:

• Agent availability (usually expressed as a percentage of logged on time)
• Average handling time (AHT)
• Answered calls ratio
• Agent talk time
• Call abandonment rate
• First call resolution (FCR)

The level of expected performance regarding such metrics will be outlined in your service level agreement. For review, gather the most up-to-date data, enter them into the checklist and proceed to compare them with what was agreed upon in the SLA.

Click here to get the call center SLA metrics tracking process template

HR service SLA metrics tracking process template

The difficulty with measuring the performance of HR services is you often have to translate qualitative data into quantitative data. This of course can never be 100% accurate, but is simply the nature of dealing with us complex humans.

Nevertheless, there are a number of key data points that can be used to evaluate performance, namely the SLA achievement rate, which is the percentage of requests and transactions that the HR service provider resolved within the agreed-upon time frame.

This checklist will guide you through the process of collecting information that can be reviewed against the SLA to verify that the service provider is meeting expectations.

If they are not, then the checklist will present you with the steps needed to update the terms of the agreement, or at worst, terminate it.

Click here to get the HR services SLA metrics tracking process template

Utilize our new approvals feature for enhanced management of service level agreements

With our fantastic new feature Approvals , you can streamline the completion of any tasks that need authorization by another person.

A number of approval tasks have been built into the templates above. A couple of examples are:

• Task 19- Customer requirements
• Task 26 – Customer approval
• Task 12- SLA compliance
• Task 27 – UpdatedSLA has been implemented

Creating your own approval tasks is super simple. Here is a quick overview of how to do so.

To add an approval task, click on the approvals button on the bottom left-hand bar within the template editor , where tasks and task headers are usually added.

Once the approval task has been put in, you can then select which tasks are subject to approval.

After the tasks that are subject to approval have been completed, the assigned decision-maker can then open the checklist, see the information from the tasks, then either approve, reject, or reject with a comment.

With approvals, it’s not just a case of flat-out acceptance or rejection; comments can be sent to the submitter to provide the feedback necessary for the task’s completion.

You can approve (or reject) tasks directly from your phone

What’s even quicker than approving or rejecting items from a browser on your laptop is doing it via your phone’s email app.

This enables you to make important decisions while on the go, no matter if you’re walking to an important meeting, or in a cab on your way to catch a flight.

4 key benefits of Process Street’s approvals feature

Here are four of the biggest benefits our approval feature can bring to your organization:

• Ensures critical tasks receive the necessary oversight.
• Managers and higher-ups can approve items and tasks quickly.
• Approval tasks can be used alongside pre-existing task features (e.g. conditional logic , dynamic due dates , task permissions )
• Fosters inter and cross-team collaboration.

With all the above benefits in mind, why not upgrade today and harness the power of a simplified approval flow yourself?

Process Street can help you achieve exceptional service level management

Process Street is superpowered checklists .

You can document workflows , business processes , and integral procedures as templates . Then, whenever you want to follow that process, you run a checklist from that template .

For recurring tasks , checklists help with business efficiency by streamlining the process. Plus, you can keep human error at bay!

Check out our intro video for more on how Process Street works.

But what makes Process Street checklists superpowered, exactly?

Our  checklist app contains incredible additional features, such as stop tasks , conditional logic , dynamic due dates , task permissions , task assignments , role assignments , and approvals . When added to your templates, these features bolster run-of-the-mill checklists into intelligent checklists that simply cannot be matched by anything else on the market.

How do you go about reviewing your service level agreements? Do you have any suggestions for SLA-related checklists that could help you optimize your business relationships? Let us know by writing a comment, your insights are important to us .  

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Alex Gallia

Alex is a content writer at Process Street who enjoys traveling, reading, meditating, and is almost always listening to jazz or techno. You can find him on LinkedIn here

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How to write a service-level agreement (with template)

A service-level agreement (SLA) is a contract between two parties that defines the deliverables, obligations, and expectations of each party. SLAs are essential in SaaS buying .

Understanding how to write a solid service-level agreement will help a business establish accountability with service providers and set realistic expectations with stakeholders while also enhancing risk mitigation. 

This post covers the details of how to write a service-level agreement and provides an SLA template for businesses to use.

What is a service-level agreement?

An SLA serves several critical purposes. It is a contractual document that acts as an ongoing reference point for service and reliability expectations, like uptime guarantees, response times for issues, and resolutions for downtime. It covers important details like length of contract, price, renewability, and scope. An SLA also outlines customer responsibilities to ensure the service is used within the standards set by the service provider.

Related: Service-level agreement (SLA) basics to improve your SaaS buying process

The 3 types of SLAs

Depending on the business, there are different types of service-level agreements that may come into play. 

Customer service-level agreement

A customer service-level agreement is needed when there is an agreement with a supplier to provide service to a customer. For example, a SaaS supplier will need to create a customer SLA and SaaS license agreement if it is going to provide SaaS access to a customer. 

Internal service-level agreement

Some businesses create internal service-level agreements to ensure alignment between in-house stakeholders, like IT, sales, and marketing. It is common for businesses that have customer service-level agreements to also have corresponding internal service-level agreements. 

If the business has entered into a customer service-level agreement to provide its SaaS solution to a customer, it may also do an internal service-level agreement with IT for help desk or support services for that customer SLA. 

Multilevel service-level agreement 

A multilevel service-level agreement is used when there is more than one service level that needs to be addressed. The multilevel SLA may combine the customer SLA and internal SLA, depending on the situation. This type of agreement helps businesses avoid overlapping or incongruent SLAs. 

What to include in a service-level agreement

Before moving into the details of a service-level agreement template and how to create one, it’s just as important to be able to quickly identify if an SLA contains all of the elements it needs.

Who is involved with creating an SLA

Regardless of the type of SLA, it should begin by addressing the parties to whom the agreement pertains. It may also reference a master service agreement (MSA) if there is one already in place. 

What terms in the SLA mean

Terms can have different meanings to different people, depending on their experience and their industry. Defining terms at the beginning of the agreement is essential to ensuring the parties entering into the agreement are aligned. Once defined, the terms should be used consistently throughout the agreement, avoiding synonyms or industry slang. 

What services are being supplied

Identifying the exact services being supplied under the service-level agreement eliminates any ambiguity about what the supplier is providing for the stated cost or discrepancies between customer expectations, service provided, and quality of service. This may also be called a scope of work.

What the costs are

An SLA should include all costs associated with the services being provided under the agreement. There should never be surprise costs that pertain to the scope of work. Itemized pricing for all aspects of service must be listed, including responsibility for any applicable taxes or other fees. It should also state that any services added that are beyond the scope of work in the SLA will be quoted separately.

What the responsibilities are of each party

Regardless of which party created the SLA, it must include a section of the detailed responsibilities (also called warranties or representations) of each party involved in the agreement. If any party in the agreement does not uphold its responsibilities, it is considered a breach. 

For SaaS agreements, this section may include items such as the terms of delivering the services, guaranteed uptime, outage management, support guarantees, performance levels, data security, compliance, use of subcontracts, proprietary rights, rules around assigning the agreement to a third party, and governing law. 

How the ongoing management of this agreement will be handled

An SLA should include an explanation of how the agreement will be managed on an ongoing basis. It will address items like contract renewals and whether they will be automatic or issued a stated number of days before the end of the agreement period. The agreement should detail terms surrounding cancellation. 

For example, perhaps the SLA must be canceled 60 days before the end of the term. A termination clause addresses what happens if either party breaches the contract. The SLA will also address how all parties should handle price increases. 

How the parties will handle legal matters

An SLA includes a section, often called indemnification or hold harmless , that describes an agreement of limitation of liability and indemnification for either party. For example, if a supplier’s SaaS solution hosts confidential customer data and that data is breached resulting in a third-party lawsuit, this section addresses liability, time limits, maximum compensation, and so on.

Any other agreements or addendums

If the SLA references any other agreements or addendums, the SLA should include them as exhibits at the end of the agreement. This could include a master services agreement, additional related SLAs, or changes that have been made to the SLA. For example, a customer might want to include their own SaaS rider that includes some internal SaaS governance as an addendum to the SLA. 

TEMPLATE: Service-level agreement to use when writing software contracts

The following easy-to-use SLA agreement template is intended to assist businesses to create their own. Here are the elements of an SLA and what should be included in each. 

Introduction

• The parties represented by the agreement
• The name of the service being provided
• The expected service dates (timeframe to and from)
• The effective date of the SLA
• Acknowledgment of all parties

Objectives or purpose

• Goals of the agreement
• Company goals
• Marketing goals
• Sales goals

Overview, or scope of work

• An issue/resolution statement, or what the solution is to provide or resolve
• A description of the scope of work to be performed under the agreement

Service commitment

• Requirements of the service provided under the agreement
• Level of service to be provided
• Service assumptions
• Service performance roles and responsibilities of the supplier
• Performance standards
• Service availability
• Guaranteed uptime
• Downtime resolution
• Data security
• KPIs and other performance metrics
• Exceptions and exclusions
• Service credits

Customer responsibilities

• Anything the customer must provide to make appropriate usage of the solution (e.g., end user workflow data) 
• The process by which a customer notifies a supplier of changing needs
• Payment term responsibilities
• Supplier’s SaaS usage requirements 

Terms of termination or cancellation

• Termination due to a breach of contract
• Cancellation before the end of a term 
• Cancellation at the end of a term 

Contract management

• Renewal processes
• Changes to pricing
• Escalation procedures
• Other changes to the SLA

Indemnification

• Limitations of liability
• Governing law

Acceptance 

• Company name
• Party signature
• Acceptance date

How Vendr can help you navigate the ins-and-outs of software and service contracts

Outsourcing SaaS management to Vendr , a third-party SaaS vendor management supplier, is one of the most effective ways to reduce the knowledge needed and time spent on service-level agreements. While businesses are still included and invested in SLAs, Vendr’s platform uses extensive SaaS industry knowledge to navigate and manage them so procurement and senior leadership time can be spent on more strategic initiatives.

Contract Management

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Writing an Effective Service Level Agreement

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Note: Want to skip the guide and go straight to the free templates? No problem - scroll to the bottom. Also note: This is not legal advice.

Introduction

Writing an effective Service Level Agreement (SLA) is a crucial part of ensuring that both parties - the service provider and the customer - understand the quality expected from their relationship. From a legal perspective, it is also essential for creating accountability and protecting both parties from financial losses due to misunderstandings or disputes. Of course, an SLA must be tailored to meet the needs of the customer while still providing enough safeguards for the provider.

The Genie AI team understands how complex legal language can be and so offer free templates on their community template library that make drafting and customizing high-quality documents easy without needing to pay a lawyer. But remember, any SLA must take into account applicable laws or regulations as well as include provisions addressing how any potential disputes will be resolved. This could including arbitration or mediation, for example, rather than expensive litigation which neither party would want to go through if at all avoidable. Furthermore, changes in services provided and any potential termination should also be addressed in the document so that expectations are clear from both sides.

In conclusion, having a Service Level Agreement is essential for legal reasons but just as important for practical ones too; it protects customers from being taken advantage of and providers from engaging in illegal activities. To help ensure your SLA meets these standards read on below for our step-by-step guidance or access our template library today.

Definitions (feel free to skip)

SLA: Service Level Agreement - A contract between two or more parties that outlines the services, performance and other expectations of a customer and a service provider.

Scope: The range of services and activities outlined in an agreement.

Metrics: Measurements that are used to evaluate performance.

Remedies: Actions that can be taken to address a breach of an agreement.

Compensation: Payment or other forms of benefit that is given as a result of a breach of contract.

Review: An evaluation of the current performance of an agreement.

Dispute resolution: A process for addressing disagreements between parties to an agreement.

Termination: To bring an agreement to an end.

Changes: Alterations to an agreement.

Roles: Assigned duties and responsibilities of each party in an agreement.

Communication protocols: Established procedures for how parties communicate with each other.

Defining the scope of the SLA

Outlining the services to be provided, establishing the timeframe for delivery, specifying any other pertinent details, establishing appropriate metrics for measuring the performance of the it services, identifying response times, identifying uptime, identifying any other measurable results, establishing remedies for when service level targets are not met, determining the form of compensation (refunds, credits, etc.), establishing a timeline for review, specifying the dates for when the sla should be reviewed, establishing any associated review processes, establishing a dispute resolution process, specifying how any disputes over the sla should be handled, establishing a termination process, specifying how the sla can be terminated in the event of a breach or other issues, establishing a process for making changes to the sla, specifying how changes to the sla should be made, defining roles and responsibilities, assigning specific roles and responsibilities to each party, establishing communication protocols, specifying how the parties will communicate with each other, creating a document outlining the sla, writing a document that can be signed by both parties, outlining all of the terms of the sla., get started.

• Identify the parties involved in the SLA and their roles
• Determine the objectives of the SLA
• Describe the geographic coverage of the SLA
• Define the applicable service levels
• Outline the responsibilities of the parties involved
• Specify the duration of the SLA

You will know that this step is completed when you have identified the parties involved in the SLA and their roles, determined the objectives of the SLA, described the geographic coverage of the SLA, defined the applicable service levels, outlined the responsibilities of the parties involved, and specified the duration of the SLA.

• List the services that will be provided in the SLA
• Make sure to include all services that the customer is expecting to receive
• Specify any services that are not included in the SLA
• Include any limitations on the services such as availability, limitations on usage, etc.
• Describe the service performance measurements, such as availability and response time
• Make sure that the services are stated in clear and measurable terms

You can check this off your list when you have listed all the services that will be provided in the SLA, specified any services that are not included, and described the service performance measurements.

• Set a timeframe for delivery of the services specified in the agreement.
• Determine the start and end dates for delivery of the services and include them in the agreement.
• Clearly define what happens if the services are not delivered within the established timeframe.
• Specify the consequences for both parties if the timeframe is not met.
• Include any applicable penalty clauses in the agreement.
• Sign the agreement to make it legally binding.

How you’ll know when you can check this off your list and move on to the next step:

• Once the timeframe for delivery has been established and included in the agreement, and both parties have signed the document to make it legally binding, you can move on to the next step.
• Identify and list out any other relevant details that should be included in the SLA, such as cost and payment terms, service contact information, service availability, and any other requirements or restrictions.
• Ensure that the language used in the SLA is clear and unambiguous, and that the details are consistent with the scope of services and timeframe established in the previous steps.
• Make sure that any additional details can be easily monitored and measured.
• Once all pertinent details have been specified, the SLA should be reviewed and signed by both parties.
• Determine which metrics are most appropriate to measure the performance of the IT service
• Consider metrics such as availability, reliability, response time, and throughput
• Collaborate with stakeholders to ensure the metrics chosen are meaningful and relevant
• Ensure the metrics are measurable and can be tracked
• Record the metrics in the Service Level Agreement

Once you have recorded the metrics in the Service Level Agreement, you can check this step off your list and move on to identifying response times.

• Establish the average response time for each type of service, such as response times for incidents, requests for changes, etc.
• Identify any exceptions to the average response times, such as responses to critical incidents or requests for urgent changes.
• Set a lower limit for response times, below which the SLA is not met.
• Make sure that the response times are realistic and achievable.
• Document the response times in the SLA.

Once you have established the response times and any exceptions, you can move on to the next step of identifying uptime.

• Determine the percentage of time that your services should be available during the agreement period
• Set a minimum uptime requirement based on the expectations of your customers
• Take into account any maintenance windows or planned outages when setting the uptime requirement
• State the uptime requirement in the agreement document
• Check off this step when the uptime requirement has been established and clearly stated in the agreement document.
• Identify other measurable results that are important to both parties and should be included in the SLA
• Examples include:
• Response time to customer inquiries
• Maximum network latency
• Maximum storage capacity
• Record the metrics and values that need to be met for any other measurable results in the SLA document
• Determine if there should be any penalties for not meeting these metrics
• Once all metrics and values are established, this step is complete
• Move on to the next step, which is Establishing remedies for when service level targets are not met
• Outline the remedies that will be taken when service level targets are not met.
• Consider how the customer will be compensated for breach of service level targets (e.g., refunds, credits, etc.).
• Describe the process for tracking, monitoring, and reporting performance against the service level agreement.
• Document the process for dispute resolution if a customer believes the service level targets have not been met.
• Include any other remedies that may be necessary.

Once you have outlined the remedies for when service level targets are not met, you can move on to the next step: determining the form of compensation (refunds, credits, etc.).

• Identify which services will be included in the SLA and the associated costs
• Consider the types of compensation that could be offered for non-performance (e.g., refunds, credits, discounts, etc.)
• Develop a structured process for how compensation will be determined and issued
• Obtain sign-off from both parties on the form of compensation
• Document the agreed-upon compensation in the SLA

When you can check this off your list and move on to the next step: Once you have obtained sign-off from both parties on the form of compensation and documented it in the SLA, you can move on to the next step of establishing a timeline for review.

• Establish when the SLA should be reviewed (e.g. annually, quarterly, etc.)
• Agree on a timeline for when the review should take place (e.g. every 3 months)
• Decide when the review should start and end (e.g. 1st of January to 31st of December)
• Document the timeline and specify which party is responsible for initiating the review
• Once the timeline is established, you can move on to the next step: specifying the dates for when the SLA should be reviewed.
• Decide how often the SLA should be reviewed and set a timeline for this review
• Determine the start and end dates for each review period
• Create a record of the review period for both parties to reference
• Establish a notification process for both parties to remind each other when the review period is coming to an end
• Once the dates are established and recorded, you can move on to the next step in the SLA writing process.
• Establish a schedule for reviewing the SLA to ensure that it is still meeting the needs of both parties.
• Decide how often the agreement should be reviewed and when the review should take place.
• Decide who should be involved in the review process and ensure they are notified of the review prior to it taking place.
• Make sure all the review criteria is documented and agreed upon prior to the review.
• During the review, review any changes since the last review, update or modify the SLA as necessary and document any changes.
• After the review, document any changes that were agreed upon and sign off on the SLA.
• When all steps are completed and the SLA is signed off, you can move on to the next step.
• Identify how the parties will handle any disputes over the SLA
• Determine the process for escalating issues and the timeline for resolution
• Specify the communication protocols for resolving any disputes
• Decide on the method for settling the dispute (mediation, arbitration, etc.)
• Agree on any other processes with the other party that will govern the dispute resolution

Once all of the above points have been discussed, agreed upon, and documented in the SLA, you can check this off your list and move on to the next step.

• Include a clause in the SLA that outlines the dispute resolution process
• Outline the different ways to settle disputes, such as arbitration, mediation, or negotiation
• Set forth a timeline for each party to respond to disputes
• Provide contact information of the people responsible for handling disputes
• Outline the process of how disputes will be resolved
• When all the above is done, you can check off this step and move on to the next step of Establishing a Termination Process.
• Determine how much notice is required prior to termination
• Decide the terms of termination (for example, termination for cause or convenience)
• Specify the conditions and procedures for terminating the SLA
• Establish whether refunds or credits are to be provided for any unused services
• Include a provision for the return of any software or other assets owned by either party
• Consider including a provision for a grace period if either party is in breach of the agreement
• Once all of the above bullet points have been addressed, the termination process may be considered established.
• Clearly outline the conditions for breach of the agreement and the resulting consequences
• Make sure both parties understand the process for terminating the agreement
• Specify the termination timeline, including any notice that needs to be given
• Address any potential legal issues that might arise from terminating the agreement
• When applicable, include details on how to resolve any disputes that may arise

You can check this off your list when you have specified the process for terminating the agreement and addressed any potential legal issues that might arise from terminating the agreement.

• Decide if the SLA needs a formal review process, as well as who should be involved in the review
• Decide if the SLA needs to be signed by both parties in order to make any changes
• Define a timeline for when changes can be made, as well as when they need to be approved
• Establish an approval process for any changes to the SLA
• Determine how any changes need to be communicated to both parties
• Identify any potential risks associated with changes to the SLA

When you can check this off your list and move on to the next step:

• When you have established the process for making changes to the SLA and have defined a timeline and approval process for any changes.
• Decide who will have the authority to make changes to the SLA.
• Establish a formal process for making changes to the SLA.
• Ensure that changes to the SLA are approved by all necessary parties before implementation.
• Define the conditions under which changes can be made (e.g. notification periods, who needs to be informed, etc).
• Document the process for making changes in the SLA and ensure it is understood by all parties.

You can check this off your list and move on to the next step when all necessary parties have agreed to the process for making changes to the SLA and it is documented in the SLA.

• Identify which party will be responsible for each service level
• Outline the roles and responsibilities of each party in the SLA
• Clearly define the expectations of each party
• Specify who is responsible for carrying out specific tasks
• Make sure all roles and responsibilities are covered
• Ensure that everyone is aware of their roles and responsibilities

When you have identified which party is responsible for each service level, outlined the roles and responsibilities of each party in the SLA, clearly defined the expectations of each party, specified who is responsible for carrying out specific tasks, made sure all roles and responsibilities are covered, and ensured that everyone is aware of their roles and responsibilities, you can check this off your list and move on to the next step.

• Review the roles and responsibilities defined in the previous step and assign tasks to each party.
• Make sure each party understands their role and the tasks they are responsible for.
• Document each party’s roles and responsibilities in the Service Level Agreement.
• Create a timeline with deadlines for each task.
• When all roles and responsibilities have been assigned and documented, you can move on to the next step.
• Identify the primary form of communication between the parties (email, phone, etc.)
• Set deadlines for response times (ex. 24 hours)
• Define expectations for responding to inquiries or requests
• Outline the methods for escalating issues (who to contact, time frames, etc.)
• Establish protocols for regular updates on the SLA

You can check this off your list when you have defined how you will communicate with each other and when you have set deadlines and expectations for responding to inquiries or requests.

• Clarify how the parties will communicate with each other on an ongoing basis, such as via email, telephone, or video conference
• Specify the frequency of communication, such as daily, weekly, or monthly
• Make sure to detail which party is responsible for initiating communication
• Include the protocols for notifications and escalation
• Document how any changes to the SLA will be communicated
• When complete, move on to the next step of creating a document outlining the SLA.
• Brainstorm what should be included in the SLA
• Outline the main points, making sure to address the agreed-upon areas of the SLA
• Create a document that is comprehensive and easy to read
• Recheck all points to confirm they are accurate and up-to-date
• You can check this off your list when the document is finished and ready to be signed by both parties.
• Outline the scope of the service, the responsibilities of each party, the delivery timeframe and any performance metrics that will be used to measure success
• Include any legal information that may be necessary and ensure that the language used is clear and concise
• Make sure that there are provisions that address any potential issues that may arise
• Provide an acceptable dispute resolution process
• Ensure that the document is signed by both parties
• Once the document is signed, store it in a secure location and provide a copy to each party
• Check this off your list and move on to the next step.

Q: How do I address local laws in my Service Level Agreement?

Asked by Madison on March 5th 2022. A: When drafting a Service Level Agreement (SLA), it is important to take into account the relevant laws and regulations of the jurisdiction in which your business operates. This is because failure to comply with these laws can lead to serious penalties or fines. Depending on the local jurisdiction, you may need to include specific clauses or provisions in the SLA that address local laws and regulations. For example, in the US, you may need to include clauses that address anti-trust regulations or consumer protection measures. In the UK, you may need to include clauses that address data protection and privacy laws. Additionally, if you are operating across multiple jurisdictions, you will need to take into account any relevant international laws or regulations that may apply to your business. It is important to seek legal advice from a qualified lawyer when drafting an SLA so that you can ensure compliance with all relevant local and international laws.

Q: What happens if I breach a Service Level Agreement?

Asked by Noah on April 24th 2022. A: Breaching a Service Level Agreement (SLA) can have serious legal and financial consequences for both parties involved. Generally, if one party breaches an SLA, the other party will be entitled to compensation for any losses they have suffered as a result of that breach. In some cases, this could include financial damages or an award of punitive damages. Additionally, depending on the jurisdiction in which the SLA is governed, there may be other remedies available to the non-breaching party, such as terminating the contract or seeking an injunction against the breaching party. Therefore, it is important to ensure that all parties involved are aware of their obligations under the SLA and that they act in accordance with those obligations. If a breach does occur, it is also important to seek legal advice from a qualified lawyer as soon as possible so that appropriate action can be taken.

Q: Is a Service Level Agreement legally binding?

Asked by Emma on May 13th 2022. A: Generally speaking, a Service Level Agreement (SLA) is a legally binding agreement between two parties and can be enforced in court should either party fail to meet its obligations. However, there are certain factors that must be present for a contract to be considered legally binding. These include an offer and acceptance between two parties, consideration (i.e., something of value exchanged between the parties), and mutual agreement and intention to create legal relations (i.e., both parties understand and agree that they are entering into a legally binding agreement). Additionally, depending on the jurisdiction in which it is formed, there may be additional requirements such as formalities or signatures in order for an SLA to be legally binding. Therefore, it is important to seek legal advice from a qualified lawyer when drafting an SLA so that you can ensure all necessary requirements are met.

Q: What should I consider when writing a Service Level Agreement?

Asked by Liam on June 21st 2022. A: When writing a Service Level Agreement (SLA), there are several key points that should be considered in order to ensure that it meets all legal requirements and adequately protects both parties involved. Firstly, you should consider what services are being provided under the agreement and what obligations each party has towards each other in relation to those services (such as timeframes for completion or levels of performance). Secondly, you should consider what penalties or remedies are available should either party fail to meet their obligations under the agreement. Finally, you should consider any other specific requirements of local law or industry standards that must be met in order for the agreement to be enforceable (such as formalities or signatures). It is important to seek legal advice from a qualified lawyer when drafting an SLA so that you can ensure all necessary requirements are met.

Example dispute

Possible lawsuits involving service level agreements.

• A plaintiff may raise a lawsuit referencing a service level agreement if they feel that the agreement was not followed, resulting in a breach of the contract.
• The plaintiff may allege that the other party did not meet the requirements of the agreement, failed to provide the services as promised, or provided services of a lower quality than specified in the agreement.
• The plaintiff may be seeking damages for any losses or expenses incurred as a result of the breach, as well as a court order requiring the other party to comply with the agreement.
• The plaintiff may also seek an injunction to prevent the other party from further breaching the agreement.
• The court may consider the terms of the agreement, any evidence of breach, and any losses or expenses incurred by the plaintiff in determining the amount of damages or other remedies that may be awarded.

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An SLA is typically issued by a technology service company to regulate its business relationship with the customer, or end-user. Web-hosting companies and SAS (Software as a Service) providers, for example, regularly have their customers sign (or agree online by clicking on an “I Agree” check-box or radio-button) an SLA at the time the user account is created. SLA is the kind of “fine print” that no end-user ever reads but what the companies refer to in order to settle all disputes. Thus it’s a very important document that needs to be prepared carefully.

A typical Service Level Agreement (SLA) consists of the following 5 main components (Source: Sun Microsystems):

1) What will the service consist of? What is the definition of the “service” in question?

2) How exactly will the service provider deliver the promised service? What are the delivery mechanisms, schedules, etc.?

3) How will the delivery be measured? Who will measure what kind and quantity of service measured? How will be “failure” be measured and acknowledged?

4) What are the sanctions or penalties in case the parties agree that the service was not delivered as specified in SLA? 5) How will the SLA change in the future? Or will it remain fixed?

There is a wide variety of SLAs , including the following:

1) Customer-Based SLA: defines the kind of service the provider will be offering to a well-defined customer, as the Accounting Department of a supermarket chain, for example.

2) Service-Based SLA: defines the service provided for all customers in general, regardless of the specific nature of the end-user. For example, the way Amazon waives shipping charges for all orders over $25, regardless of who places the order. Note that such service-based SLAs do not need to be permanent and can be changed unilaterally by the provider unless it is prevented by some other agreement that the provider has signed.

3) Multi-Level SLA: defines how the same service will be provided to different customer groups with different conditions. For example, airline companies provide different levels of service to first-class and economy-class passengers despite the fact that both groups of customers fly to the same destination inside the same aircraft.

There are also Internal SLAs defining the nature of services that one department or subsidiary of a company will provide to another. Such SLAs are used to determine whether it’s more “optimal” to procure the service from an internal provider versus a third party. By educating yourself about the SLAs you can add one more item to your catalog of offerings as a technical communicator and make a better impression during the job interviews.

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• MSP business strategy

How to write an IT service-level agreement

A service-level agreement (sla) is a document that clearly lays out your responsibilities as a client's managed services provider. learn how to write an sla to protect your managed services business by avoiding confusion with customers that can lead to expensive lawsuits..

• Yuval Shavit, TechTarget

Writing an IT service-level agreement (SLA) is important if you're rolling out a services-based line of business, such as managed services. Whereas many resellers may have previously acted only as intermediary between their customers and vendors, more and more are providing service directly -- or at least rebranding services from a managed service provider (MSP) as their own.

This closer, longer-term relationship means you'll have to draft an SLA to define exactly what you should and shouldn't be expected to do for your clients. An SLA may even be a prerequisite to getting your company insured.

What is an SLA?

An SLA essentially serves to protect you by limiting your liability, according to Charles Weaver, president of the MSP Alliance , a Chico, Calif., association for MSPs. Because SLAs spell out what is expected of both parties, they not only protect you in lawsuits, but help prevent them in the first place and can resolve disputes that might otherwise hurt the business relationship. Writing an IT service-level agreement lets both parties know what to expect, so you can resolve disagreements before they become heated.

If you subcontract any work, the SLA should also specify this and explain how your client's data can be shared with third parties. This can be especially important if a client has to comply with regulations, like HIPAA or Sarbanes-Oxley, that restrict how information can be shared.

SLAs can also make your job easier by restricting your client's ability to hire outside consultants to work on the machines you are hired to cover. These clauses aren't meant to lock your client in, but to protect you from having to fix problems an outside party introduces. Another common clause limits your liabilities to the amount your client has paid you, said Rob Scott, a partner with Scott & Scott LLP , a Dallas law firm specializing in IT law.

A typical approach is to draft two documents. The first is a master services agreement (MSA), which defines your services and liabilities in general terms; this will be the same for all your clients. The second is the SLA itself, which is specific to each client and lists exactly what you're expected to do -- such as how many and which servers you will cover, and what you're expected to do with them.

Writing an IT service-level agreement

The first step to writing an SLA is to determine what services you want to offer in layman's terms, Weaver said. The SLA will simply formalize those offerings. You should hire a lawyer to draft the MSA and SLA, since they are legally binding documents. If possible, you should hire a lawyer who understands your business, Scott said; for instance, if you're an MSP, a lawyer specializing in MSPs would be best. But since the documents are essentially contracts, the most important core skill is an understanding of contract law, Weaver said.

The MSA and SLA should cost roughly $3,500, Scott said. Scott provides an MSA verbatim to each client, as well as a "check-the-box" template for SLAs. This template allows his clients to write service-level agreements for their own clients without having to consult him each time; they just check off the appropriate boxes and fill in values for each client's specific needs, Scott said.

Outcome-based contracts: Be careful what you wish for

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MSA – Master Service Agreement Review for Startups and SMEs

Among the challenges every business faces there’s the critical task of managing contracts , particularly Master Service Agreements (MSAs). These documents, often running dozens of pages, contain the legal and business terms that define the relationship between companies and their clients or vendors.

The dense legal language, the bunch of clauses, and the potential for costly oversights make it essential to approach the task with a clear strategy. This guide is here to help. Whether you’re an executive, part of a legal team, or a business development professional, understanding how to review an MSA agreement effectively can save your company time, money, and unnecessary headaches.

We’ll walk you through the essential steps of the MSA review process, offering tips and tools—including AI tools to streamline your workflow and help you focus on what matters most, growing your business.

What the MSA review process looks like

Reviewing a Master Service Agreement (MSA) is an easier task when you break it down into manageable steps to cover all critical aspects related to your business and make the process more straightforward.

• Identify critical clauses. We’re talking about clauses that often include payment terms, termination conditions, liability limitations, intellectual property rights, and confidentiality agreements. Pay particular attention to any clauses that might seem standard but could carry hidden risks if left unchecked.
• Understand legal obligations. Get familiar with the obligations you’re agreeing to. This includes knowing what’s required of you under the contract and what you can expect from the other party. For SMEs and startups without extensive legal resources, it may be helpful to consult with a legal advisor.

You may be interested in Contract Review Cost: How Much Does It Cost?

• Ensure alignment with business goals. Ideally, the MSA should support your goals. Meaning, that there must be an alignment with your operational needs, finances, and long-term strategy. Imagine your goal is to maintain flexibility, you might want to negotiate favorable termination/exclusivity terms then.
• Collaborate with legal and business teams. Reviewing an MSA shouldn’t be done in isolation. Involve your legal team and business stakeholders. Legal teams provide insight into potential risks and compliance , while business teams can assess whether the terms make sense from an operational POV.
• Use a checklist to streamline the process. To make sure nothing is overlooked, consider using a contract review checklist . A checklist can help you systematically go through each section of the MSA. It’s a simple tool that can save you time and reduce the likelihood of missing important details.

Tips for reviewing an MSA

It’s time to dig deeper into the details of the MSA. The goal of this next chapter is to define a solid agreement that protects your business but aligns with your strategic business goals at the same time.

Focus on payment terms. Payment terms are one of the most critical aspects of any MSA. Terms should be clear and favorable to your business. Look for details on invoicing procedures, payment timelines, and any conditions under which payments can be delayed or disputed. If your business relies on a steady cash flow, consider negotiating terms that minimize delays and get you prompt payments.

Review termination clauses carefully. Termination clauses define how and when the agreement can be ended, and under what conditions. Pay close attention to these, as they impact your business continuity. Ideally, you want to avoid terms that allow the other party to terminate the agreement without cause on short notice. If such terms are unavoidable, try to negotiate a longer notice period or other conditions.

Assess liability limitations. Liability clauses set the boundaries for what each party is responsible for if something goes wrong. These clauses often limit the amount of liability one party can claim from the other, so it’s crucial to understand these limits and assess whether they are fair. In some cases, you may want to negotiate higher liability limits or include exceptions for specific types of damages.

Negotiate key terms to align with your goals. Every business has unique needs and goals, and your MSA should reflect that. Don’t hesitate to negotiate terms that align with your strategic objectives. Whether it’s adjusting payment schedules, modifying exclusivity clauses, or specifying the scope of services, tailor the agreement to suit your business. Both parties should benefit from the MSA terms.

Creating a master service agreement review checklist

Here’s a well-structured DIY master service agreement review process to streamline your legal work.

Master service agreement review with AI

For SMEs and startups with limited resources, the traditional manual review process can be time-consuming, prone to errors, and costly. This is where legal AI assistance comes into play, bringing a new way to speed up the MSA review process with greater accuracy, and of course, cost-effectiveness.

Tools like AI contract review software typically use natural language processing (NLP) and machine learning algorithms to analyze contracts. This technology is trained on vast amounts of legal data, enabling them to understand the nuances of contracts. When applied to an MSA, AI can parse through the text, spot key clauses, and even suggest revisions based on best practices or specific business needs.

Gartner says that large language models (LLMs) are expected to boost legal department productivity by 10% to 20% over the next 2–5 years . The report highlights that the benefits of deploying AI in law practice far outweigh the risks, making it an essential tool for modern legal teams.

A word to the wise: Incorporating AI into your MSA review process doesn’t mean replacing your legal team—it means giving them superpowers with tools that make their work more efficient and effective. In fact, AI  technology allows your team to focus on high-level strategic decisions and negotiations.

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Wrapping up your MSA review process

MSAs sets the foundation of your business relationships. Navigating the complexities of these agreements can be challenging, but it becomes manageable with a strategy. If you follow a structured review, focus on key clauses, and use tools like contract review checklists and AI contract review software, you’ll make sure that your next MSA is legally sound and aligned with your business goals.

The time you invest in thoroughly reviewing and negotiating your MSA will pay off in the long run by protecting your business interests and fostering stronger, more reliable partnerships. Whether you’re just starting out or looking to refine your approach, the tools and tips outlined in this guide can help you streamline the review process, reduce risks, and ultimately, drive your business forward.

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SaaS contract best practices — how to get your agreements right 

Olga Asheychik Senior Web Analytics Manager at PandaDoc

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Keith Rabkin Chief Revenue Officer for PandaDoc

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The challenge with the SaaS (software as a service) delivery model is that you need contracts for every application, system, or cloud service in your SaaS stack.

That’s a bunch of renewals, security protocols, and administration for your IT team to monitor and curate.

If done wrong, your relations with the SaaS service provider could lead to service disruptions, regulatory fines, and service disruption.

In this article, we’ve gathered expert tips and best practices for handling, drafting, signing, and renewing SaaS contracts.

Key takeaways

• SaaS contract best practices begin with reviewing contracts to make sure they contain terms, provisions, and clauses that safeguard your interests when entering partnerships with providers.
• Use auto-renewals and automation for SaaS contracts that are critical to business operations and workflows.
• Choose a contract management solution with a favorable pricing model, excellent support, reliable uptime, and airtight data security.

Review contracts thoroughly

As basic as it sounds, you need to go through every detail of the contract, service level agreements (SLA) , or end user license agreements (EULA) with a watchmaker’s microscope.

Make sure the terms and conditions align with the results of your contract negotiation with the service vendor, as well as your business needs.

Pay attention to clauses covering renewal terms, liabilities, indemnification, warranties, termination, usage limits, and support.

If possible, hire a legal team or lawyer to review the contract before buying the software license.

Create a system of records

If you’re in a company with hundreds of SaaS contracts running concurrently, establish a system of records to track duplication, redundancies, overcharges, and usage.

A well-structured system of records will show which SaaS applications teams are using and whether there are any overlaps.

It will also give you a better understanding of total spend and upcoming renewals for better cost savings.

For instance, these records will help you understand if multiple teams within your organization are paying for Premium Jira instances instead of unifying all of them under one enterprise plan.

You can track these records on spreadsheets. However, to keep things more organized and accessible, consider getting a SaaS contract management solution.

Choose the right management solution

Before choosing any contract management software, consider how it handles security and other key factors.

Some questions to guide your evaluation include:

• What security features and safeguards are available?
• How does this solution address my business needs?
• Does the software vendor provide timely support?
• Can I use this tool to edit and sign contracts?
• Can it scale with my company?

Go through independent user reviews to get a feel of the mood around the contract management platform.

Simplify the process

If multiple people are working on a contract, keep the drafting, approval, and review processes simple.

Here is a sample flow using PandaDoc for sending a business proposal for approval (the process works the same for getting SaaS contracts approved).

After creating the document, attach the emails of the people in the approval chain. Then click on “Send for approval.”

The intended recipient will get the document in their email. The next step is to either “Approve” or “Reject” the request.

If the recipient accepts the request, you can now send the final SaaS agreement. Otherwise, the file will stay under review. Either way, the sender will receive a notification.

This process is straightforward and easy to replicate. Senders can also add conditional approvals to automate the transfer of documents based on preset conditions.

Be careful with auto-renewals

Auto-renewals are like blowfish: getting it wrong can be lethal for your business; getting it right will keep your services running like clockwork.

Before locking your organization into SaaS subscriptions with service providers, evaluate their importance to the overall business operations as well as their reputation.

For instance, you can activate auto-renewals for AWS services — it’s Amazon; they always deliver.

But for lesser-known SaaS providers whose services are not critical to business operations, consider deactivating automatic renewals .

Instead of entering your credit card details, use invoices for payment. This will help you review SLAs at the end of each term to determine whether to pay for the service.

Establish a working relationship

When working with a SaaS business provider, focus on developing a rapport with the company rep.

Why? This relationship will help your business financially and administratively in the long run.

For example, the company rep can reach out to your company directly to offer better pricing options or usage rates.

They will also prioritize your concerns in the queue if something goes wrong during the contract management process.

Pay attention to usage

As mentioned earlier, some SaaS agreements bill users according to usage. So your access is capped by how much you pay.

In some cases, you’ll realize you’ve maxed out the limit of a 3-month contract in less than one week — which means you now need to renew the contract.

To avoid this conundrum, iron out details for usage tracking and monitoring.

You can also assign usage monitoring and regulation to the service provider for more accurate reporting.

Choose a favorable SaaS pricing model

Contracts and SLAs for SaaS products follow different pricing models.

• The flat rate model means all users pay the same amount for a specified term of the contract.
• The pay-as-you-go ( usage-based ) model means you pay for your actual usage. VoIP providers can charge you for the number of minutes used.
• The pay-per-user (user-based) model lets you pay according to the number of people making use of the product or service.
• The tiered (feature-based) model gives you access to features depending on how much you pay. Some SaaS vendors use the freemium model to let you try all features for free before paying.

Your SaaS agreement should specify the pricing structure as well as the amount and the payment timelines (contract renewal dates).

For critical infrastructure hosted by highly reputable SaaS companies such as Amazon and HubSpot , opt for long-term contracts with rolling renewals. These providers also offer discounts to long-term partners.

Prepare for contingencies

Things often go wrong in partnerships; that’s why you need guarantees to protect you from contingencies.

The SaaS contract should contain warranties for software delivery, support, and maintenance.

This could include refunds or monetary compensation for critical service disruptions.

Establish a conflict resolution mechanism for every contract in order to ensure fair and timely compensation for damages resulting from subpar service delivery.

And finally, seek a legally binding guarantee that you can terminate the contract if the vendor fails to meet their end of the bargain. Otherwise, you’ll have to pay the remaining duration of the contract by law.

Ask about IP and data storage policies

Your SaaS agreement should cover how the provider handles your intellectual property and the measures employed to protect your confidential data.

This starts with data storage. The provider has to be transparent about the duration of your contract data storage and the mechanisms for getting rid of it.

So if they don’t follow the contract, they will have to pay fines in addition to getting rid of the data — just like Google had to pay $5 billion for storing customer data from “Incognito Mode.”

Add confidentiality clauses , intellectual property provisions, and standalone non-disclosure agreements to protect sensitive business data.

Add analytical tools

Multiple SaaS contracts contain a goldmine of user and business information waiting to be tapped and analyzed.

That’s why you must streamline and consolidate all contracts into one contract management solution with analytical tools.

Modern AI-enabled analytical tools contain contract intelligence features such as optical character recognition (OCR) for extracting valuable metadata for documents.

These analytical tools will help you track the close or churn rate for contracts, renewal costs, usage limits, high-performing vendors, response time, resource-intensive applications, and other essential metrics.

Guarantee support and maintenance

Any contract you sign with a SaaS company should contain provisions for support and continued maintenance.

Why? Because when outages or product failures occur, the vendor should be responsible for running maintenance to get things back to normal.

They should also roll out updates and upgrades to plug all performance loopholes.

These provisions should be integrated into a single contract. However, some companies create separate SLAs and pricing for different levels of support. Your contract with them should spell out the conditions.

Use integrations and automation

The best way to manage multiple SaaS contracts effectively is by using a contract lifecycle management (CLM) solution with automation capabilities.

They also contain customizable templates and boilerplate clauses , which help your business save time, money, and resources.

Automation and integrations with tools like Salesforce and Zoho CRM allow you to automate renewals by creating reminders and alerts before the due date.

This will give you time to decide whether to cancel your contract or renegotiate.

Beef up security

Keep contract details private because they contain vital business information and payment details that hackers can access for nefarious purposes.

Without airtight data security measures, cybercriminals can gain access to receiving accounts in order to set up a man-in-the-middle (MITM) attack — like the 2017 Equifax data breach .

To beef up data protection, add encryption protocols and multi-factor authentication.

Use single-tenancy and role-based access control (RBAC) to isolate contracts and keep stakeholders on a need-to-know basis.

Improve your SaaS contract management

PandaDoc is a contract management solution used by companies to edit, draft, sign, and renew agreements with SaaS service providers.

This software comes with an intuitive built-in editor that allows you to amend contract terms and embed essential fields into a contract.

Embed CRM integrations , notifications, and reminders for auto-renewals to guarantee continuous access to SaaS solutions.

To start using PandaDoc for your SaaS contracts, book a quick demo right away.

PandaDoc is not a law firm, or a substitute for an attorney or law firm. This page is not intended to and does not provide legal advice. Should you have legal questions on the validity of e-signatures or digital signatures and the enforceability thereof, please consult with an attorney or law firm. Use of PandaDoc services are governed by our Terms of Use and Privacy Policy.

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