In service delivery, there’s a familiar tension between internal and external demands. As early as 1998, CIO magazine reported on this dilemma faced by service teams forced to prioritize paying customers over internal users, raising the question: What do you do when your internal people are screaming for help because you’re serving the paying customer instead of them?
More than two decades later, business operations have become far more interconnected. With organizations juggling both on-premise systems and external service providers, things can get pretty complex. The need for clear, structured agreements has never been more important, and that's where Service Level Agreements (SLAs) come in.
Whether you're a Managed Services Provider (MSP) or a business relying on one, this blog post explains how SLAs help deliver clarity, accountability, and mutual success.
What is an SLA?
An SLA is a formal agreement between a service provider and a customer that outlines the expected level of service. MSPs and the businesses they serve rely on clearly defined SLAs to establish mutual expectations, reduce ambiguity, and ensure consistent service delivery.
At its core, an SLA serves as a blueprint for the working relationship. It details:
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What services will be delivered
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How performance will be measured
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The responsibilities of each party
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The process for handling issues or escalations
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Remedies or consequences if service levels are not met
For instance, an SLA might commit to a one-hour response time for critical issues and 99.9% uptime for hosted services. These benchmarks provide a measurable framework for accountability and transparency.
But SLAs aren’t just about technicalities—they’re about trust. They give businesses peace of mind knowing their service needs are taken seriously and give providers a clear path to meet and exceed expectations.
Key SLA Metrics
SLA is only as effective as the metrics it uses to define success. These performance indicators set the foundation for how services are delivered, monitored, and improved over time. While the specific terms of an SLA can vary depending on the vendor, industry, and client needs, some metrics are universally recognized across most agreements.
These commonly used SLA metrics provide a baseline for operational quality and help manage expectations on both sides of the relationship. They also guide IT Service Management (ITSM) teams in tracking performance and ensuring service delivery stays on course.
Figure 1: Key SLA Metrics
Here are the most important SLA metrics to understand:
Uptime (Availability)
Uptime, also known as availability or planned uptime, is a metric that refers to the percentage of time a service is fully operational, outside the hours of scheduled downtime for maintenance. High availability, typically 99.9% or higher, is crucial for businesses that rely on uninterrupted access to systems and applications.
Response Time
Response time tracks how long it takes the service provider to acknowledge a reported issue. This is especially critical in scenarios where delays can escalate problems or affect user experience.
Mean Time to Repair (MTTR)
Mean Time to Repair (MTTR), also commonly referred to as Mean Time to Resolve, is a metric that measures the average time it takes to restore a service after an outage or failure from the moment the issue is detected to the point where normal operations resume.
For example, if an MSP guarantees a 4-hour MTTR, that means they are committing to restore services within 4 hours after any unexpected disruption.
Ticket Prioritization
Now, 4 hours might seem reasonable for resolving a minor issue, but it’s far too long when something critical is at stake. That’s where ticket prioritization comes in. Since not all issues are created equal, SLAs often define multiple MTTR targets based on the severity or impact of the issue.
By assigning priority levels—like Critical, High, Medium, or Low—organizations can ensure that the most urgent problems get immediate attention, while lower-impact issues are queued appropriately. For example, a server outage that halts operations may have a one-hour MTTR, while a request to install new software may allow for 24 hours.
This approach not only helps service teams allocate resources efficiently but also improves transparency. Customers know what to expect, and service providers can plan their workloads around clearly defined priorities. In short, prioritization is the bridge that connects realistic response times with business-critical needs.
Escalation
Even with clear MTTR targets and ticket prioritization in place, not every issue gets resolved within the expected timeframe, and that's where escalation protocols come into play. It ensures that when a ticket isn’t progressing as it should, especially high-priority ones, it doesn’t get stuck in limbo. Instead, it moves up the chain, whether that means alerting more senior engineers, involving specialized teams, or looping in management. This process is often time-bound, with specific rules such as “if unresolved after 2 hours, escalate to Tier 2 support.”
Escalation is especially important for critical incidents, where delays can have serious business consequences. It reinforces accountability and helps reduce extended MTTRs, ensuring that priority tickets remain top of mind until they’re closed.
Support Hours
Support hours define when a service provider is actively monitoring, responding to, and resolving issues. These windows can vary widely—some MSPs offer support only during standard business hours (e.g., 9–5, Monday to Friday), while others provide 24/7 coverage.
No matter how strong your escalation process or how well you prioritize tickets, it won’t matter if support isn’t available when you need it. That’s why defining support hours is critical when writing SLAs, as they directly impact overall customer experience.
When negotiating or reviewing SLAs, businesses should ensure support availability aligns with their actual operational hours. If you’re running a global or always-on service, after-hours and weekend support should be present. On the other hand, if most of your activity happens during regular workdays, limited support may suffice and be more cost-effective.
SLA vs. SLO vs. KPI
SLAs, Service Level Objectives (SLOs), and Key Performance Indicators (KPIs) are often used in conversations interchangeably, but each plays a distinct role in service delivery. Understanding their differences can help you better manage service expectations and outcomes.
As mentioned above, SLAs are formal agreements that outline the expected level of service between a provider and a client, establishing key metrics like uptime, response time, etc. In contrast, SLOs are internal performance targets set by the service provider to ensure they meet the commitments outlined in the SLA. While an SLA establishes the general framework for service delivery, SLOs break down those broader commitments into more precise, actionable goals. Thus, sometimes these are also referred to as OLAs (Operational Level Agreements) since they are operationally tracked.
KPIs, on the other hand, are metrics used to measure performance against specific goals and objectives. They are used to assess the overall performance of a service but are not typically tied to the contractual obligations of SLAs. Unlike SLAs and SLOs, which are often specific to service delivery, KPIs track a wide range of factors such as customer satisfaction, operational efficiency, and cost-effectiveness.
SLA Expectations Between a Business and Managed Services Provider
When businesses enter into a partnership with a Managed Services Provider (MSP), there are always multiple parties involved, each with their own needs and expectations. This is especially true when you consider the dynamics that come into play when an MSP is servicing both external customers and internal teams.
SLA should serve as the foundation for a transparent and accountable relationship between the MSP and the business they serve, clearly defining the agreed-upon standards for service delivery.
What to look for in a Managed Services Provider’s SLA?
Now, let’s take a closer look at what businesses should specifically look for in an MSP’s SLA to make sure that both internal teams and external customers receive the support and service they need.
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Clarity of service scope: SLA should outline precisely which services are covered, including any limitations or exclusions. These can be detailed out clearly for each service catalog item under contract.
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Performance metrics and KPIs: SLA should include detailed performance metrics and KPIs to measure how effectively the MSP is delivering the agreed services. The clearer these metrics are, the easier it is to hold the MSP accountable for service quality.
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Response and resolution time targets: SLA should set clear, measurable targets for how quickly the MSP will respond to and resolve issues. This includes specifying different response times based on the severity of issues, ensuring that critical issues are handled more urgently than minor ones. Make sure that the targets are realistic and achievable, based on the MSP's capabilities.
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Escalation procedures: SLA should define when and how issues are escalated to higher levels of support or management. This helps prevent bottlenecks and guarantees that critical issues will be dealt with promptly.
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Service credits or penalties for SLA breaches: If the MSP fails to meet the agreed-upon service levels, there should be penalties or service credits in place to compensate for the disruption. These service credits or penalties not only incentivize the MSP to meet their commitments but also ensure that businesses receive value for the services they’re paying for, even when things go wrong.
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Support hours and coverage: SLA should specify support hours provided by the MSP and any associated costs for support outside of regular business times, including emergency or after-hours support.
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Flexibility for changing needs: SLA should include provisions for periodic reviews and renegotiations to ensure that it continues to meet the business’s evolving requirements. This could mean updating performance metrics, adjusting support hours, or incorporating new services as the business grows.
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Transparency and reporting: SLA should specify how often and in what format the MSP will report on performance metrics. Regular reports on uptime, issue resolution, and other key performance indicators will provide valuable insights into how the MSP is performing and where improvements might be needed. Make sure the SLA includes clear expectations for communication and reporting.
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When you're aiming for 99.9% uptime, you only have 43 minutes and 50 seconds of downtime to work with each month. In an environment where you’re managing dozens of systems, manual recovery isn’t just inefficient—it’s a risk. With that much at stake, there’s no room for mistakes or delays. No time to wait for someone to spot a problem, no time for escalation, and no time to juggle multiple consoles to fix an issue manually.
Automation isn’t a luxury—it’s a necessity.
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