4/26/2019 Service Level Agreement Template

CON-TRACTS.COM **
CONSULTING
Service Level Agreement Template

Here is a published article that I wrote about SLAs:

HOME .
ABOUT US
* A Simple Template for Service Level Agreements (SLAs) - NCMA CM Magazine
in April 2008
INTRODUCTION

WHAT IS
"CONTRACTS A PRACTICAL AND SIMPLE TEMPLATE
MANAGEMENT" ?
FOR
12 PRACTICAL SERVICE LEVEL AGREEMENTS
REASONS TO USE
WRITTEN
AGREEMENTS
A “Service Level Agreement” (SLA) is a document containing specific contractual service level obligations. A
WITH SUPPLIERS SLA describes the minimum service performance criteria that a service provider contractually promises to meet
while providing a service.[1] It typically also sets out the remedial actions and any liabilities that will take effect
CONTRACT
LEGALESE if the service provider’s performance falls below the contractually obligated services level obligations stated in
REDUCTION TIPS the SLA. The SLA is an essential sub-component of the larger overall contract between a service buyer-recipient
and the service seller-provider. The SLA often appears as a schedule, exhibit or addendum to a Statement of
60 PRACTICAL
CONTRACT Work (SOW) under the Master Services Agreement between the service buyer and the service provider.
DRAFTING TIPS

COMMERCIAL
Good SLAs are distinguished by clear simple language with a tight focus on business.[2] The benefits of a good
CONTRACTS SLA, as a management tool for the provision of services, can be substantial. A good SLA will improve quality,
MANAGEMENT reduce risks, and strengthen relationships.
BEST PRACTICES

50 TIPS FOR YOUR In my thirty-year contracts management career, I have reviewed, drafted, and modified many SLAs. One thing I
STATEMENT OF have noticed is that it is very difficult to find a good practical SLA template that provides a simple outline of the
WORK (SOW)
key practical issues to address when initially reviewing, drafting or modifying a SLA. So, I developed the
JOHNNY'S SOW following practical and simple SLA template that I routinely use as a guide when reviewing, drafting or
TEMPLATE modifying a SLA:
SERVICE LEVEL
AGREEMENT __________________________________________________________________________________
TEMPLATE

INTERNATIONAL SCHEDULE / EXHIBIT / ADDENDUM __________

SALES AGREEMENT
CHECKLIST

CHECKLIST FOR SERVICE LEVEL AGREEMENT

JOINT UNDER
COLLABORATIVE
AGEEMENTS STATEMENT OF WORK __________________
OF
115 ISSUES IN
COMMERCIAL
MASTER SERVICES AGREEMENT
SERVICES
AGREEMENTS INTRODUCTION
RISK This Service Level Agreement (SLA) is fundamental to the provision of services under the
MANAGEMENT associated Statement of Work (SOW) _________ issued under the Master Services
CHECKLIST FOR Agreement (Master Agreement). This SLA essentially documents and defines the
OUTSIDE COUNSEL parameters of the services relationship itself between the Client and the Consultant.
AGREEMENTS PURPOSE: This SLA is a negotiated agreement between the Client and the Consultant that is incorporated, by
SEVERABILITY this reference, into the applicable SOW _____ under the overall larger Master Agreement. It is designed to create
an agreement on the applicable services, priorities, and responsibilities. The use of this SLA has been designed
40 by the parties as a “mutual expectations-managing mechanism”[3] with regard to service levels under the
INDEMNIFICATION
CLAUSE REVIEW applicable SOW of the Master Agreement.
TIPS

US PATENTS: 30
BACKGROUND: To develop this SLA, the parties collaborated by gathering information, discussing ground
FACTORS TO rules for working together, developing the SLA document, generating respective buy-in, and completing all
CONSIDER applicable pre-implementation tasks.
40 NON
DISCLOSURE DEFINITION OF SLA: This SLA is:
AGREEMENT
REVIEW TIPS
1. A communications tool. The value of this SLA is not just in the final product or service. The very process
14 IMPORTANT, of establishing this SLA helps to open-up communications between the parties.
PRACTICAL, AND
USEFUL

www.con-tracts.com/id85.html 1/4
4/26/2019 Service Level Agreement Template
INVENTORSHIP 2. A conflict-prevention tool. This SLA helps to avoid or alleviate disputes by providing a shared
ISSUES
understanding of needs and priorities of the parties.
START-UP ENTITY
INTELLECTUAL 3. A living document. This SLA is not a dead-end document consigned to the file. On a predetermined
PROPERTY DUE
DILIGENCE
frequency (______________ ), the parties to this SLA will review the SLA to assess service adequacy and
CHECKLIST negotiate adjustments (if necessary and mutually agreeable).
4 STEP
NEGOTIATION
4. An “objective basis for gauging service effectiveness”.[4] This SLA ensures that both parties use the same
CHECKLIST criteria to evaluate service quality.
P-4 PREFERRED IMPORTANT SLA TERMS DESCRIBED IN THIS SLA: The following important terms are described below
PROVIDER
PARTNERING in this SLA: Stakeholders, Mandatory Outcomes, Minimum Requirements of supplier for each Mandatory
PROGRAM Outcome, Minimum Service Standards, Key Performance Indicators (KPIs) with associated Purpose and
OFF SHORE
Measurement per KPI, and Performance Measurement Scorecard.
OUTSOURCING OF
COMMERCIAL IDENTITY OF STAKEHOLDERS: The Client’s Stakeholders are as follows:__________________.
CONTRACTS
MANAGEMENT
DESCRIPTION OF THE SERVICES TO BE PERFORMED BY CONSULTANT: The following services shall
BUSINESS be performed by Consultant:_______________________________________________.
INSURANCE
BROKER
AGREEMENTS SLA MANAGERS:
JOHNNY'S 1. The SLA Manager for Client is:_____________________________________________
CERTIFICATE OF
INSURANCE
REVIEW 2. The SLA Manager for Consultant is:__________________________________________
CHECKLIST

TX BUSINESS TYPE 3. Each party to the SLA has appointed its above-stated SLA Manager who will work with the other
party's above-stated SLA Manager to manage the SLA. The SLA Manager's responsibilities of each
TX LLC CHECKLIST
party include:
TX CORP
CHECKLIST · Serving as the point of contact for problems or concerns related to the SLA itself and the
STATE BAR OF
delivery of services described in the SLA.
TEXAS

CLIENT REVIEWS
· Maintaining ongoing contact with the other party's SLA Manager

AVVO · Serving as the primary point of contact in the escalation of problems process
ARTICLES
· Coordinating modifications (if mutually agreed by the parties) to service delivery and to the
57 RESUME SLA itself
BLUNDERS

YOGI-ISMS · Periodically assessing the effectiveness of mechanisms selected for service tracking and
UECKER-ISMS
reporting

BASEBALL IS
DIFFERENT
· Planning and coordinating service reviews

CLIENT ACCESS · Facilitating or participating in conflict resolution processes regarding service effectiveness
ONLY PAGE -
PASSWORD
PROTECTED · Regularly assessing and reporting on how the parties can further strengthen their working
relationship

· Delegating responsibilities to, or seeking the assistance of, colleagues, subordinates or

members of the other party's staff to address issues that may arise under the SLA.

· Planning training designed to foster a heightened service attitude, create an enhanced

awareness of the elements of high-quality customer service, and provide skills in service delivery.
[5]

MANAGEMENT REQUIREMENTS ELEMENTS:

The management requirements elements are as follows:

1. How service effectiveness will be

tracked:___________________________________________

1. How information about service effectiveness will be reported and addressed:________________

1. How service-related disagreements and problem-management issues will be

resolved:_________

www.con-tracts.com/id85.html 2/4
4/26/2019 Service Level Agreement Template

1. How the parties will review and revise the SLA (if so mutually agreed) :____________________

SLA MANDATORY OUTCOMES: Mandatory Outcomes for the Consultant’s services are as
follows:________________________________________________________________________. [Note:
Required Mandatory Outcomes are items such as acceptable/proficient quality services provided in a timely
manner, knowledge shared/reused to achieve consistency without duplication of effort, maximize economies of
scale and purchasing leverage, compliance with Client’s policies/guidelines, retention of key Client staff,
acceptable / proficient quality of performance, confidentiality maintained, and avoidance of conflicts of interest
(COI).]

SLA MINIMUM REQUIREMENTS OF CONSULTANT FOR EACH STATED MANDATORY OUTCOME:

The Minimum Requirements for the Consultant’s services for each Mandatory Outcome are as
follows:______________________________________________________________________.
[Note: Minimum Requirements are sub-requirements for each Mandatory Outcome, such as, accuracy,
timeliness, quality, technology systems, processes, competitive fees, good value, Client policies, Client
guidelines, retention, succession, confidentiality, and COI.]

SLA MINIMUM SERVICE STANDARDS FOR CONSULTANT: Minimum Service Standards for the
Consultant’s services are as follows: ________________________________________________.
[Note: Mandatory Standards are items such as capability, service skills, managing fees and expenses, timeliness,
COI, understanding Client needs, meeting Client needs, reporting, and resolving service complaints.]

KEY PERFORMANCE INDICATORS (KPIs): KPIs applicable to the Consultant’s services are as
follows:__________________________________________________________________________.
[Note: KPIs are items such as the following seven (7) factors: (1). knowledge/skills/expertise/results (on-budget,
quality of services, professionalism); (2) matter management / administration (efficient staffing of skills vs.
tasks, cost consciousness, control & reporting, cooperation, organization, planning, productivity, responsiveness,
timeliness); (3) use of systems / processes and technology (timely detailed accurate plans, progress reporting,
budgets, timely detailed error-free invoices, accurate run-rate financial forecasting, effective communication,
sensitivity to schedule & cost, use of processes); (4) compliance with set goals, procedures, guidelines and
policies (timely delivery, securing approval, prompt notice of significant changes, compliance with procedures,
guidelines & policies); (5) teamwork (within Consultant entity, Client entity, and other contractor entities); (6)
cost consciousness and control (willingness to consider discounts, caps, value-based pricing, award fee
agreements, budget vs. spend vs. progress reporting); and (7) Client Stakeholder satisfaction (sensitivity to
wants/needs, anticipation of wants/needs, willing cooperation, resolution of conflicts, understands Client’s
business culture).]

The individual KPIs for the Consultant’s performance will be evaluated by Client every calendar quarter using
the scoring range of 1 (significant improvement needed), 2 (some improvement needed), 3 (acceptable), 4
(consistently effective) or 5 (highly proficient).

PERFORMANCE MEASUREMENT: Quarterly (or as otherwise agreed-to by the parties) the Stakeholders will
review and report to Consultant on Consultant’s services performance under the applicable SOW regarding: (1)
compliance with Mandatory Outcomes; (2) compliance with Minimum Service Standards; and (3) achieving a
score of #3 (Performance Target) or higher on each of the above seven (7) KPIs.

SLA ASSESSMENTS: In the event the Consultant: (1) fails to comply with the Mandatory
Outcomes or (2) fails to comply with the Minimum Service Standards or (3) achieves less
than the Performance Target of a # 3 rating on each of the seven (7) KPIs, an
assessment (fee reduction or fee rebate) will be made against the Consultant and paid to
Client as follows:________________________________. [Note: The SLA specific
assessment details will be agreed-to by the parties prior to issuing the SOW and included
in this SLA.]

SLA CREDITS: In the event the Consultant: (1) complies with the Mandatory Outcomes, (2) complies with the
Minimum Service Standards, and (3) achieves more than the Performance Target of a # 3 on any one or more of
the seven (7) KPIs, a credit [additional fee payment(s)] will be made by Client to Consultant as
follows:_____________________________________________________________. [Note: The SLA credit
details will be agreed-to by the parties prior to issuing the SOW and included in this SLA.]

The parties have executed this SLA on the dates set forth below intending this SLA to become effective on the
Effective Date of the Agreement.

UNDERSTOOD AND AGREED

Signature___________________________ Signature ___________________________________

Printed Name________________________ Printed Name_________________________________
Title_______________________________ Title________________________________________
Date________________________________ Date________________________________________

www.con-tracts.com/id85.html 3/4
4/26/2019 Service Level Agreement Template
______________________________________________________________________________________________

This simple and practical SLA template is certainly not exhaustive. Every service level
commitment arrangement has some unique aspects that may not be addressed in this
template. However, if you routinely use this practical and simple template as one of several
resources when you are initially planning, reviewing, drafting or modifying a SLA, you will be
surprised with the large number of substantive and material service level issues that will be
surfaced for proper resolution.

About The Author

JOHN (“JOHNNY”) E. MILLER, a Texas and Missouri attorney, is a contracts

management consultant who has worked in contracts management for many
companies in the last 30 years. He is a member of the Greater San Antonio
Chapter of NCMA.

End Notes:

[1] Wikipedia contributors, “Service Level Agreement,” Wikipedia,

http://en.wikipedia.org/wiki/Service_Level_Agreement (accessed January 9, 2008).

[2] Christopher Koch, “SLA: A CIO’s Guide To Success,” CIO,

http://www.cio.com/article/101500/SLAs_A_CIO_s_Guide_to_Success (accessed January
9, 2008).

[3] Naomi Karten, “Establishing Service Level Agreements,” Karten Associates,

http://www.nkarten.com/sla.html (accessed January 11, 2007).

[4] Naomi Karten, “Establishing Service Level Agreements,” Karten Associates,

http://www.nkarten.com/sla.html (accessed January 11, 2007).

[5] Naomi Karten, “Establishing Service Level Agreements,” Karten Associates,

http://www.nkarten.com/sla.html (accessed January 11, 2007).

www.con-tracts.com/id85.html 4/4