What is an SLA? The Key to Better Business Relationships

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The Key to Better Business Relationships

An SLA (Service Level Agreement) outlines performance standards for ongoing services, while an SOW (Statement of Work) defines the specific tasks, timelines, and deliverables for a project. KPIs (Key Performance Indicators) are metrics used to measure how well the SLA commitments are being met.

Yes, SLAs can be legally binding if they are part of a broader contract or formally agreed upon by both parties. However, the enforceability depends on how clearly the terms are defined and whether they comply with applicable laws.

SLAs can be modified mid-term if both parties agree to the changes. It’s best practice to document such amendments formally through a written agreement or addendum, and to ensure all stakeholders are informed.

SLA drafting typically involves representatives from legal, operations, IT/service delivery, and account management teams. Including both provider and client perspectives ensures the SLA is realistic, measurable, and mutually beneficial.

Not at all. SLAs are also used internally—between departments like IT and HR or Legal and Sales—to set expectations for service delivery and accountability within the organization.

Repeated SLA breaches can trigger escalation protocols, renegotiation, penalties, or even contract termination depending on the terms. Chronic non-compliance may also damage business relationships or reputational trust.

Yes. Some industries have specific frameworks or compliance requirements that influence SLA design—such as ITIL in IT service management, HIPAA in healthcare, or ISO standards in manufacturing and supply chain.