Fecha: noviembre 4, 2026

Por:  Isabela Barahona M.

In increasingly service-driven business environments, companies depend on a wide range of internal and external service providers: technology platforms, cloud providers, consultants, logistics operators, outsourced business functions and even internal departments. Yet one recurring challenge remains the same: how can a business translate general expectations about “good service” into commitments that can actually be understood, measured and managed?

This is where a Service Level Agreement, or SLA, becomes particularly valuable.

At its simplest, an SLA defines the services to be provided, the performance standards that apply to those services, the responsibilities of the parties and the consequences or procedures that follow when agreed service levels are not achieved(1). But an effective SLA should do considerably more than provide a list of response times or penalties. Properly designed, it can become a practical governance tool for managing expectations, allocating responsibility, monitoring performance and improving a commercial relationship over time.

For corporate teams negotiating or managing service arrangements, the challenge is therefore not simply to have an SLA, but to have one that works.

1. Start with the business relationship, not the metrics

A common mistake is to begin drafting an SLA by immediately discussing percentages, response times and other key performance indicators. Before determining how performance will be measured, however, the parties need to establish exactly what service is being provided and what the business expects that service to accomplish.

The scope should clearly identify the services that are included, any relevant operating hours or availability periods, and equally importantly, what is excluded. A vague service description will inevitably create uncertainty when performance is later assessed.

SLAs can also serve different purposes depending on the relationship. They may regulate services provided to a particular customer, establish standardized levels for a service offered to multiple customers, govern relationships with external vendors, or even operate internally between departments within the same organization(2).

Internal SLAs can be particularly useful for corporate teams. A legal department, for example, may establish service expectations with business units regarding contract review, regulatory advice, corporate approvals or escalation of urgent matters. In that setting, the SLA is not necessarily intended to create legal remedies between departments. Its principal function may instead be to clarify priorities, service timelines and the responsibilities of both the requesting team and the legal function.

The essential question should therefore come before the metric:

What is the business outcome that the parties are trying to achieve?

Only once that question is answered should the parties determine how success will be measured.

2. Turn expectations into measurable commitments

An SLA becomes useful when general expectations are translated into objectively assessable commitments.

Typical metrics may include availability, response time, resolution time, transaction processing time, recovery periods, defect rates or other indicators relevant to the particular service(3). In technology services, for example, uptime may be essential. For a professional or administrative service, response and resolution times may be more meaningful.

Corporate teams should distinguish between what is being measured and the target that must be achieved. Academic literature on SLA management distinguishes a Service Level Indicator, or SLI, from a Service Level Objective, or SLO. The SLI is the metric itself—for example, response time—while the SLO is the target attached to that metric—for example, a response within four business hours(4).

This distinction sounds technical, but it has significant drafting consequences.

Consider an SLA that simply requires the provider to “respond to urgent incidents within 30 minutes.” What constitutes a response? Does an automatically generated email satisfy the requirement? Does the response need to come from a qualified person? Must the provider begin investigating the problem, or merely acknowledge that a ticket has been received?

A metric can therefore be formally measurable while still failing to capture the commercial intention of the parties.

The better approach is to define not only how quickly something must occur, but also what must actually occur for the requirement to be satisfied.

3. Choose fewer, better metrics

More metrics do not necessarily produce a better SLA.

The temptation to measure every element of the service can create unnecessarily complex arrangements that generate substantial data without providing useful information. Research and industry guidance therefore emphasize selecting metrics that are meaningful, reasonably easy to collect and directly related to the performance that matters to the business (5).

A useful metric should generally satisfy several characteristics. It should be:

• relevant to the business objective;
• objectively measurable;
• realistically achievable;
• substantially within the responsible party’s control; and
• sufficiently clear that both parties understand how it will be calculated.

Recent academic literature describes similar characteristics through the concepts of attainability, meaningfulness, measurability, controllability, understandability, affordability and mutual acceptability(6).

The importance of a realistic baseline should not be overlooked. Setting excessively demanding targets may lead to recurring technical breaches without necessarily improving service. Conversely, targets that are too easily achieved provide little incentive to improve performance.

Where reliable historical information is unavailable, the parties may consider establishing an initial benchmark and allowing the targets to be reviewed after sufficient performance data has been collected.

4. Remember that responsibility usually runs both ways

One of the most important drafting principles for an effective SLA is that service delivery rarely depends exclusively on the provider.

Customers may need to provide information, approve documents, grant system access, make personnel available or comply with agreed procedures before the provider can perform its obligations. An SLA that measures only the provider’s performance without addressing these dependencies may produce unfair or distorted outcomes.

For example, if a service provider must complete a task within three business days after receiving certain information from the customer, the SLA should make clear when the measurement period begins and what constitutes complete information.

Industry guidance therefore recommends ensuring that metrics measure matters that are within the provider’s control and that customer dependencies are expressly addressed(7).

This is one of the reasons SLAs should be understood as bilateral governance mechanisms rather than one-sided performance guarantees. Both parties should understand their responsibilities and how one party’s performance may affect the other’s ability to comply.

Corporate teams should therefore ask:

Who must provide what? By when? In what form? What happens if the necessary dependency is not satisfied?

Addressing those questions at the drafting stage can prevent significant disputes later.

5. Decide how performance will actually be monitored

A well-drafted SLA has limited value if nobody can determine whether it is being met.

The agreement should therefore explain how performance information will be collected, who is responsible for measuring it, how frequently it will be reported and how the parties will review the results. Monitoring may take place through dashboards, system-generated reports, service management platforms or other agreed mechanisms.

The methodology matters as much as the target itself.

Where a metric is commercially significant, the parties should understand the source of the underlying data and whether the measurement process is sufficiently reliable. For critical services, independent or automated monitoring may sometimes be appropriate(8).

The reporting process should also be proportionate to the relationship. A highly complex monthly report containing dozens of indicators may create more administrative work without improving decision-making. A smaller number of carefully selected indicators, accompanied by regular review meetings, may provide greater value.

The objective should not merely be to determine whether the provider “passed” or “failed” during a particular month. Performance data should help identify trends, operational problems and areas in which processes can be improved.

6. Remedies should support performance, not replace relationship management

SLAs commonly provide consequences when service levels are missed. These may include service credits, fee adjustments, remediation plans, escalation mechanisms or, in cases of serious or repeated failure, termination rights(9).

Those mechanisms are important. However, corporate teams should be cautious about designing an SLA entirely around penalties.

An overly punitive model may encourage defensive behavior rather than genuine collaboration. Industry guidance increasingly emphasizes using SLA performance as a basis for productive discussions regarding priorities, performance and improvement rather than simply as a mechanism for imposing sanctions(10).

A proportionate escalation structure may therefore be preferable.

A first failure might trigger notification and corrective action. Repeated failures could require a formal remediation plan or management escalation. Persistent or material failures could then trigger financial consequences or termination rights.

The appropriate structure will depend on the importance of the service, the bargaining position of the parties and the potential consequences of failure.

From a legal perspective, corporate teams should also ensure that SLA remedies are consistent with the underlying contract. Questions such as whether service credits are the customer’s exclusive remedy, whether other damages remain available, and how repeated failures interact with termination provisions should not be left unclear.

7. Treat the SLA as a living framework

Business relationships change. Technology changes. Workloads change. New regulatory requirements emerge. A service level that was appropriate when a contract was signed may no longer reflect the parties’ needs two years later.

An SLA should therefore contain a structured process for periodic review and amendment.

Research on business relationships describes SLAs as “living” instruments because they can evolve alongside the underlying relationship(11) . More recent academic analysis similarly views SLA management as a lifecycle involving definition, negotiation, management, monitoring, enforcement and eventual renewal or conclusion(12).

For corporate teams, the practical lesson is straightforward:

Define → Measure → Monitor → Review → Adjust.

Review does not necessarily mean lowering standards whenever a provider encounters difficulties. Rather, it allows the parties to determine whether the original assumptions remain valid and whether performance targets continue to reflect commercial priorities.

The SLA should therefore specify who participates in reviews, how frequently they occur and what procedure applies when changes are required.

8. Modern SLAs should also consider security and privacy

For technology and data-intensive services, traditional SLA metrics such as uptime and response time may no longer be sufficient.

Modern service relationships increasingly require companies to consider cybersecurity, confidentiality, data protection, access controls, incident management and remediation. Recent research on Security Service Level Agreements (SecSLAs) and Privacy Level Agreements (PLAs) reflects the increasing effort to translate security and privacy expectations into measurable commitments(13).

Corporate teams should therefore consider whether obligations relating to security incidents can be operationalized through the SLA.

For example, instead of merely stating that a provider must maintain “appropriate security,” the contractual framework may also address matters such as incident notification periods, remediation timeframes, security monitoring, reporting obligations and escalation procedures.

Not every security or privacy obligation can—or should—be reduced to a KPI. However, where operational performance directly affects cybersecurity, business continuity or personal data, incorporating measurable service expectations can strengthen the broader risk allocation contained in the contract.

9. Conclusion: From Contract Language to Effective Governance

A strong SLA does more than define what happens when a service provider fails. It creates a common framework for understanding what successful performance looks like in the first place.

For corporate teams, the most effective SLAs tend to share the same characteristics: clearly defined services, carefully selected metrics, realistic targets, mutual responsibilities, reliable monitoring, proportionate remedies and mechanisms for regular review.

The drafting process itself is equally important. It forces the parties to identify assumptions, dependencies and expectations that might otherwise remain unstated until something goes wrong.

Ultimately, the value of an SLA should not be measured by the number of KPIs it contains or the severity of its penalties. Its real value lies in whether it helps the parties translate commercial expectations into measurable commitments and use those commitments to manage the relationship effectively.

That is what transforms an SLA from another annex to a contract into a meaningful corporate governance tool.

Footnotes

1. Legal Lands. (n.d.). Understanding service level agreements (SLAs): A comprehensive guide.
2. Haberkern, J. (n.d.). SLA agreements. DiliTrust.
3. Overby, S., Greiner, L., & Gibbons Paul, L. (2024, June 21). What is an SLA? Best practices for service-level agreements. CIO.
4. Nicolazzo, S., Nocera, A., & Pedrycz, W. (2026). Service level agreement (SLA) and security SLA (SecSLA): A comprehensive survey. Journal of Network and Systems Management, 34, Article 74.
5. Overby et al. (2024).
6. Nicolazzo et al. (2026).
7. Overby et al. (2024).
8. Overby et al. (2024).
9. Haberkern, J. (n.d.). SLA agreements. DiliTrust.
10. Overby et al. (2024).
11. Penning, F. (2014). Service level agreements in business relationships [Master’s thesis, Erasmus University Rotterdam].
12. Nicolazzo et al. (2026).
13. Nicolazzo et al. (2026).