In the world of business, it is common for companies to work together towards a common goal. When two companies collaborate, there may be a need for a service level agreement (SLA) to ensure that both parties are meeting their obligations and expectations. This article will explore what an SLA is, its importance, and what should be included in an SLA between two companies.

What is a Service Level Agreement?

A service level agreement is a written contract that outlines the services to be provided by one party to another. An SLA sets out the expectations of both parties, including obligations, responsibilities, and metrics for measuring performance. It is a critical tool for ensuring that both parties meet their obligations and that the services provided meet the required standards.

The Importance of a Service Level Agreement

An SLA is essential because it helps both parties understand their roles and responsibilities. It also provides a framework for measuring performance and ensuring that both parties meet their obligations. Without an SLA, there may be confusion about what is expected, and disputes can arise. An SLA can also help to build trust between parties, as it demonstrates that both parties are committed to meeting their obligations.

What Should be Included in an SLA?

When creating an SLA, some key elements should be included. These include:

1. Service description – This section should clearly outline the services to be provided, including any specific requirements or deliverables.

2. Service level objectives – This section should state the expected service level objectives, such as response times, availability, and performance.

3. Service level targets – This section should outline the specific targets and metrics to be used to measure performance against the service level objectives.

4. Responsibilities of each party – This section should outline the roles and responsibilities of each party, including any specific requirements or obligations.

5. Escalation procedure – This section should outline the process for escalation if there are any issues or disputes.

6. Service credits and penalties – This section should outline any service credits or penalties that may be applied if the service level targets are not met.

7. Termination clause – This section should outline the circumstances under which the SLA can be terminated.


In conclusion, an SLA is an essential component of any collaboration between two companies. It sets out the expectations of both parties and provides a framework for measuring performance. When creating an SLA, it is essential to include key elements such as service description, service level objectives and targets, responsibilities of each party, escalation procedure, service credits and penalties, and termination clause. By following these guidelines, both parties can work together effectively towards a common goal, with clear expectations and obligations.