Service Level Agreement

In every industry customers expect that they receive proper and on-time services. And, to guarantee these expectations, agreements are usually signed between the customers and the service providers that describe the expected level of service to be provided.

The types of contracts used are:

• SLA (Service Level Agreement)
• OLA (Operational Level Agreement)
• UC (Underpinning Contract)

SLAs

Service Level Agreements (SLAs) define the commitments between requestors and the IT service provider within an organization. SLAs specify the level of urgency, response time, and resolution time for tickets, as well as the escalation rules for tickets that are not resolved or responded to within the stipulated time frame. SLAs can be set for both departments and sub-departments.

By default, four SLAs are predefined, each with its own rules for resolution and escalation times. These default SLAs apply to the Request module and are triggered based on the priority of the request.

• Low Priority
• Medium Priority
• High Priority
• Urgent Priority

How SLA Works?

Service Level Agreements (SLAs) require collaboration across different configuration settings. Based on these configurations, the SLA assigns a 'Due Date' to the ticket. For example, an SLA for a low-priority ticket might have a due date set for 7 days. The system will calculate the due date by adding 7 days to the ticket's creation date.

SLAs take into account the working business hours of the technician group. For instance, a technician group named 'Support Team' works 24/7. For a low-priority request, the system will compute 7 days by adding all the working hours, resulting in a due date 7 days later. If a ticket is created on January 1, 2020, at 10:00 AM, the system will set the due date as January 8, 2020, at 10:00 AM.

In another scenario, a technician group called 'IT Team' works Monday to Friday from 10:00 AM to 7:00 PM with a 1-hour lunch break. For a low-priority request, the system will compute 7 days by adding only the working hours (excluding weekends and lunch breaks). Thus, if a ticket is created on January 1, 2020, at 10:00 AM, the system will set the due date as January 10, 2020, at 6:00 PM. Here, the system calculates based on working days, not hours, so the due date falls at the end of the working day rather than at 10:00 AM.

If a request is not resolved within the stipulated time frame, it results in an SLA violation. The system then triggers the escalation flow, and the actions defined in the escalation process take effect.

OLAs

Operational Level Agreements (OLAs) are contracts between internal teams that ensure the fulfillment of SLAs. Similar to SLAs, OLAs specify service targets, but they also include additional service targets and are typically established before SLAs. For example, there might be an OLA between the Support Team and the Technical Team.

Operational Level Agreements (OLAs) are internal contracts between different teams or departments within an organization that work together to meet Service Level Agreements (SLAs) with external customers. These agreements ensure that each team understands and meets their responsibilities, contributing to the overall service delivery.

Key Aspects of OLAs:

Purpose:

OLAs define the specific responsibilities of internal teams, ensuring that each team knows what is required of them to support the SLA. They help coordinate the activities of different teams to deliver a seamless service to the end customer.

Service Targets:

OLAs contain detailed service targets that go beyond those specified in SLAs. These targets are more granular and focus on the internal processes and workflows necessary to meet the overall SLA commitments. Examples include response times, resolution times, and specific tasks or processes that need to be completed.

Scope:

OLAs typically cover the interactions and dependencies between support teams, technical teams, network teams, and other internal departments. They outline how these teams will collaborate and support each other to achieve the service levels promised to customers.

Sign-off:

OLAs are usually signed off before SLAs to ensure that all internal processes and responsibilities are clearly defined and agreed upon. This proactive approach helps prevent any internal bottlenecks or misunderstandings that could affect the SLA performance.

Examples:

• Support Team and Technical Team: An OLA might specify that the Technical Team must provide a diagnosis for any reported issue within 2 hours of it being escalated by the Support Team.
• Network Team and IT Service Desk: An OLA could outline that the Network Team must resolve network-related issues within 4 hours to ensure the IT Service Desk can meet their SLA of resolving user connectivity issues within 6 hours.

Benefits of OLAs:

• Improved Coordination
• Enhanced Accountability
• Efficient Problem Resolution
• Proactive Management

Overall, OLAs are essential for the successful implementation and management of SLAs, providing a framework for internal teams to work together effectively and deliver high-quality services to customers.

UCs

Underpinning Contracts (UCs) are agreements between IT service providers or technicians and external vendors. These contracts outline the responsibilities and service expectations from the vendors, ensuring that their services support the internal processes and meet the overall Service Level Agreements (SLAs) with customers.

Key Aspects of Underpinning Contracts (UCs):

Purpose:

UCs ensure that the external vendors provide the necessary support and services required by the IT service provider to meet the SLAs with their customers. They underpin the SLAs by detailing the specific obligations of the vendors.

Service Targets:

UCs include detailed service targets and performance metrics that the vendors must meet. These targets are aligned with the internal OLAs and the overall SLAs to ensure a seamless service delivery.

Scope:

UCs typically cover the delivery of products, services, and support from external vendors. This can include hardware and software supply, maintenance services, technical support, and other third-party services.

Vendor Responsibilities:

The contracts specify the responsibilities of the vendors, including response times, resolution times, service availability, and compliance with agreed standards and procedures.

Monitoring and Reporting:

UCs often include provisions for monitoring and reporting vendor performance. This helps in tracking whether the vendors are meeting their contractual obligations and service targets.

Examples:

• Hardware Maintenance: A UC might specify that a hardware vendor must replace faulty equipment within 24 hours of a reported issue to ensure minimal disruption to IT services.
• Software Support: A software vendor might be required to provide technical support and resolve software issues within a specified timeframe to support the IT service provider’s SLA commitments.

Benefits of Underpinning Contracts (UCs):

• Aligned Expectations
• Risk Management
• Improved Service Quality
• Accountability

Overall, Underpinning Contracts are essential for ensuring that the services provided by external vendors are reliable, meet the necessary standards, and support the IT service provider in fulfilling their SLA commitments to customers.

Difference between SLA, OLA, and UC

Types/Parameters	SLA	OLA	UC
Nature of Agreement	External agreement with customers.	Internal agreement between organizational teams.	External agreement with vendors/suppliers.
Primary Focus	Customer service quality and performance.	Internal process coordination and support.	Vendor service quality and support.
Parties Involved	IT service provider and customers.	Internal teams/departments.	IT service provider and external vendors.