A Service Level Agreement (SLA) is a formal negotiated agreement between two parties. It is a contract that exists between the Service Provider (SP) and the Customer. It is designed to create a common understanding about service quality, priorities, responsibilities, etc. SLAs can cover many aspects of the relationship between the Customer and the SP, such as performance of services, customer care, billing, service provisioning, etc. However, although a SLA can cover such aspects, agreement on the level of service is the primary purpose of a SLA. The focus of this Handbook is therefore on the management of the SLA and the Quality of Service (QoS) that is agreed in the SLA.

The SLA Handbook will assist SPs in developing new services with associated SLA parameters, align SLA parameters to meet Customer requirements and internal processes, assign internal processes according to SLAs, and respond to SLA requirements from other SPs. The Handbook helps a SP introduce operational changes, improve internal measurements and reporting, enrich Customer relations and differentiate itself from its competitors.

QoS is used by a SP to measure performance both technically and in terms of Customer satisfaction. Determining the QoS provides a discriminator between various types of service that a supplier provides, and leads to opportunities to balance the level of service quality offered against price and Customer expectation. The use of QoS agreements in SLAs provides SPs with the opportunity to delight their Customers, build stronger long-term relationships and brand image, and maintain/grow market share. The growing complexity of global services brings together a myriad of services, suppliers and technologies, all with potentially different QoS requirements. SPs are trying to integrate these services into one Next Generation Network (NGN) that supports these requirements, while striking a delicate balance between cost and return on investment.

Corporate Customers are seeking SLAs that offer deeper verification and analysis of the performance they are paying for. In addition to the primary requirement for high availability, the ability to monitor on an increasingly granular level is imperative for corporate networkers. For example, they want to know the number of successfully delivered packets in a given time period, the amount of time a user was connected to a server, notification of what traffic type is using the most bandwidth, what percentage of the traffic is going to a specific sub-network or server, etc. This Handbook is designed to be a reference for SPs as they develop new services and to assist in Customer discussions. It will inform and educate about the intricacies of SLAs as well as provide a structure for defining agreements such that relevant SLA parameters and values can be agreed upon that are achievable and verifiable. The Handbook is not intended to provide a cookbook of tables to be filled out without knowledge of the underlying requirements, capabilities or limitations of the technology or service(s).

The SLA Management Handbook is the result of carefully considering what elements would assist all parties: customers, service providers, and their respective vendors, with a framework around which expectations can be shared and met. Customers are becoming more dependent on the availability of their telecom-related services and need guidance in acquisition of reasonable and appropriate business solutions, while telecom vendors need to offer cost effective solutions that meet these increasingly vital corporate requirements.

The perspective of the SLA Management Handbook is that the end customer develops telecommunication service quality requirements necessary to operate their business. These requirements are brought to the service provider and the two parties begin to assemble the optimum set of SLA parameters and values for the services. The agreed-upon SLA requirements flow down through the organizations of the associated service providers and become the basis for internal management processes and Quality of Service (QoS) values. Customer satisfaction is improved by identifying the implications for supporting the service by the internal support infrastructure(s) of both the service provider and the customer.

Service Provider Benefits
Clarifies customer expectations

• Introduce operational changes, improve internal measurements and reporting, enrich customer relations and differentiate the service provider from its competitors.
• Create more knowledgeable customers who can better express their needs to the service provider, which can reduce the time devoted to the negotiating process.
• Produce a common language and understanding with the customer on characterizing network and operational parameters.

Customer Benefits
Specify requirements that meet my needs

• Help customers develop the baseline, establish the requirements, customize a SLA contract, validate the ongoing performance compliance to end-to-end service level objectives, and review and refine the SLA through an interactive process.
• Aid customers to evaluate the relationship between the technology-specific service and network elements and the technology/service-independent parameters of the SLA. This includes considering how, within each of the multiple service providers administrative domains, these parameters map, interpret, or mimic the performance perceived by the customer.

Vendor Benefits
Differentiates where we excel

• Assist vendors in understanding customer and service provider requirements for SLAs.
• Help equipment providers agree on the mapping of technology-specific parameters and measurement methods into service-specific parameters and measurement methods.
• Aid software vendors in agreeing on common interface definitions for SLA management.