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Service Level Agreements (SLA)

Updated Aug 27, 2023

What is SLA? 

SLA, which stands for "Service Level Agreement," serves as a contractual agreement between a customer and a service provider. It has predefined response and resolution times for various types of incidents and issues, often referred to as trouble tickets, aiming to provide customers with a certain level of service quality and assurance.

SLAs are commonly employed in IT organizations providing technical support for software, hardware, and other services. For example, a company specializing in SAP software might enter into SLAs with its clients to guarantee timely issue resolution. These SLAs can be categorized based on the severity or criticality of the incident. For instance, high-priority incidents might require resolution within 10 hours, while medium-priority incidents could be addressed within 3 days.

Imagine a scenario where a company offers technical support for its software products. To cater to different customer needs and incident severities, the company could define multiple SLA levels. For instance:

  1. Gold SLA: Guaranteed reaction time of 30 minutes and a resolving time of 4 hours.
  2. Silver SLA: Guaranteed reaction time of 4 hours and a resolving time of 24 hours.

Features of SLAs

SLAs have various components that define the terms and conditions of service delivery. These components include:

  • Service Profile: This outlines the attributes and scope of the service to be provided. It defines the nature of the service, such as maintenance or hotline support.
  • Response Profile: The response profile details the expected reaction times to incidents of different priorities. It clarifies how quickly the service provider must acknowledge an incident after it's reported.

Integrating SLAs

In practical implementation, SLAs are integrated into various aspects of the service process:

  • Master Data: The Service Levels assignment block is present in different master data, such as service contracts, business partner records, product items, and organizational units. This allows for the assignment of appropriate service profiles and response profiles to specific transactions.
  • Pricing: SLAs influence pricing in service contracts. The service provider can adjust the pricing based on the response time defined in the SLA. This ensures that customers paying for quicker responses are charged accordingly.
  • Escalation Management: If an incident cannot be resolved within the stipulated time, an escalation process is initiated. This process entails predefined steps to escalate the issue to higher levels of management or support, ensuring that unresolved incidents are promptly addressed.

Customization and Enhancement

While standard SLA parameters are often delivered by software providers like SAP, organizations can customize and enhance SLAs based on their specific needs. Additional parameters can be introduced using customer-specific set types, with data processing facilitated through Business Add-Ins.


Service Level Agreements serve as the backbone of customer service and support contracts, ensuring that both service providers and customers are aligned regarding expected service quality and response times. By outlining predefined reaction and resolution times for various incident severities, SLAs streamline support processes, enhance customer satisfaction, and provide a clear framework for efficient incident management.