Service Level Agreement (SLA)

An agreement between two or multiple parties that defines specific levels of performance related to given activities. The SLAs are targets or standards that must be met by a supplier, outsourcing company, vendor, service provider or partner. SLAs are written in plain language specifying the target performance levels and how the target performance will be measured. They include the timing of the agreed measurement and a clearly defined issue resolution and escalation process for all parties agreeing to the SLA. An SLA may also build in penalties or incentives tied to performance targets for improved performance or for excellence.

As related to a process, SLAs focus on measureable outcomes that have been defined by stakeholders to meet set performance criteria.