LU4 SLA Reader

Question 1

What are Service Level Agreements (SLA)?

Answer 1

Service level agreements provide an opportunity for the purchaser of services to
precisely specify the level and quality of service to be provided, to implement
business best practices and world- class levels of service. SLAs also contain
provisions for cost recovery and penalties for non-performance or failure to meet the benchmarks. Typical SLAs will also have provisions for termination of the contract.

Question 2

Issues regarding SLA:

Answer 2

• Incomplete contracts
• Information asymmetry
• Managing complexity
• Enforcement costs
• Termination costs

Question 3

SLAs are the primary tool regulating the relationship between the XXX and XXX of software services. SLAs are the glue that holds the XXX process
together and provides managers for both purchasers and vendors with objective
guidelines for performance and payment.

Answer 3

SLAs are the primary tool regulating the relationship between the XVENDORX and XPURCHASERX of software services. SLAs are the glue that holds the XOUTSOURCINGX process
together and provides managers for both purchasers and vendors with objective
guidelines for performance and payment.