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Service Level Agreement (SLA)

Also known as: SLA

A service level agreement (SLA) defines the measurable standards a supplier commits to — such as response time, uptime or delivery reliability — and the consequences of missing them.

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An SLA turns service expectations into specific, measurable targets: for example, a delivery reliability percentage, a maximum response time, or a defect threshold. It usually specifies how performance is measured and what remedies or credits apply if the supplier falls short.

SLAs make performance manageable and disputes objective. They pair naturally with supplier scorecards, which track actual performance against the agreed levels over time. Clear SLAs protect the buyer while giving the supplier a fair, defined standard to meet.

Frequently asked questions

What is a service level agreement?
An SLA defines the measurable service standards a supplier commits to — such as delivery reliability, response time or uptime — along with how they are measured and the remedies for falling short.
What should an SLA include?
The specific metrics and targets, how they are measured and reported, the review cadence, and the remedies or service credits that apply if the supplier misses them.

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