Monday, 13 January 2014

What can a Service Level Agreement be used for?

What can a Service Level Agreement be used for?


A service level agreement can be used in any situation where one party is providing a service to another party, irrespective of the scale of the service. A service level agreement is for the benefit of both the service provider and the customer. It is beneficial for the service provider as they are defining the scope and describing the service they are providing for the customer within a defined delivery period, in return for a payment schedule outlining payment for services.

It is also beneficial for the customer as they have a defined and clear level of service detailed in the agreement to ensure they are getting the service that fits their needs and requirements. Common features of a service level agreement include the type of the service to be provided, as well as warranties, responsibilities and guarantees. All service level agreements will be between a service provider and a customer. These terms are present in all service agreements and in most cases the agreement will also outline a time frame that the provision of the service will end or is due to be completed.

Service agreements are used for both long term and short term projects. A large scale example is a construction project where a construction company will rent equipment under a service level agreement. The company renting the equipment will require the inclusion of terms of use, warranties, and guarantees of the equipment and will have a defined period of time that they will be rented for.

The company supplying the equipment will need to outline its responsibilities in the agreement and ensure the equipment is capable of fulfilling its obligations and is in the appropriate working condition. The construction company engaging the equipment will need to ensure that they are using the equipment within the guidelines provided. In this case both parties will want to have a detailed understanding of each others responsibilities and expectations in order to provide the service required.

A smaller scale example for use of a service level agreement would be the engagement of a contract for cleaning services. These typically include a specified a time frame, defined responsibilities and the detailed expectations of both parties involved to ensure the mutual benefit of each party.

Finally, a very small scale example for use of a service agreement is for the engagement of an internet service provider by an internet user. In this case, as contrasted to the above examples, the user has relatively low bargaining power with the service provider with respect to the level of service to be provided. However, there will still be responsibilities for both parties, such as providing a minimum agreed standard of service on the providers behalf and following terms of use on the internet users part.

Overall, from a service provider and customer's standpoint, a service level agreement is beneficial to ensure clarity and certainty of the service as well as to ensure the rights of both parties are understood and protected.

Author: Vanessa Emilio
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