What Is the Purpose of an SLA Management System?

By Staff Contributor on July 14, 2021

Service-Level Agreements (SLAs) are a crucial component of most modern businesses reliant on third-party vendors and software providers to power the features that make day-to-day operations possible. Without an SLA, there’s no definition of what constitutes an acceptable level of service, which puts your organization in a tenuous position.

The purpose of an SLA management system is to help you keep track of these contracts and ensure vendors are meeting the terms outlined therein. Proactive SLA monitoring lets you identify when parties breach your contract agreements and take quick steps to solve the problem.

In this article, we’ll discuss what SLAs are and the purpose of SLA management systems. Then we’ll go over three key features to look for in such a system.

An Introduction to Service-Level Agreements

An SLA is a contract or framework outlining what services you expect a particular third-party vendor to provide and under which conditions. For example, let’s say you sign a contract with an enterprise hosting provider.

In most cases, web hosts will include service availability clauses within their SLAs, outlining “acceptable” situations where there may be downtimes.

With an SLA, you can get vendors to commit to providing a specific level of service. By putting this in a written contract both parties agree to, if partners don’t meet those standards, you may be entitled to remuneration of some sort.

Typically, SLAs also outline what happens if the vendor fails to meet their obligations. In the example of an enterprise web host, you may receive credit for further service if they break their availability requirements. Other types of “solutions” you might see within SLAs include the option to break your contract early or a contractual agreement to fix technical issues within a certain timeframe.

Ideally, each SLA should be a unique contract between a third-party and your business. However, it’s all too common for vendors to use SLA templates for most of their customers. It’s essential to review these documents thoroughly and check to ensure they meet your organization’s expectations.

The Purpose of an SLA Management System

Modern businesses often rely on a broad range of third-party vendors to fulfill basic day-to-day operations. For example, you and your employees might regularly use services such as:

  • Web help desks
  • Hosting platforms
  • E-commerce software
  • Project management software
  • Internal communication tools

Each of those represents a critical component of your business. If a service ceases to work or doesn’t meet the standards you require, it can affect your entire operation. For each of those examples, you should have a unique SLA in place.

As your business grows, you’ll need to deal with a larger number of such contracts, which reinforces the need for an SLA management system. Using an SLA management tool, you’ll be able to store and access all your vendor contracts easily. The system can help you navigate individual clauses, understand costs, let you know when an SLA is up for renewal, and more.

All of this is possible without an SLA management system, but it becomes much more complicated. With a modern software solution, you’ll need to devote less manpower to SLA monitoring, and you’ll know if there’s an SLA breach typically in minutes.

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Not all SLA management systems offer the same features, though, which is why it’s crucial to have an idea of what to look out for in a solution that can help your business.

3 Key Features of an SLA Management System

The SLA management system you choose should depend on which features your business can benefit the most from. For this section, we’ll focus on critical functionality you need for SLA monitoring, regardless of what type of operation you run.

1. SLA Monitoring and Breach Notifications

Breach notification is the most important feature of any SLA management system. The system should integrate with other IT systems within your organization to detect if the software you’re using is in breach of their contractual agreements.

Some software enables you to configure rules for breach notifications, including specific targets and metrics to monitor.

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If you can set up SLA breach notifications, you’ll know as soon as a vendor fails to fulfill their contractual obligations. You’ll also be able to assess how long the problem lasts, which is critical when it comes to discussing remuneration for your troubles.

2. SLA Renewal Notifications

As with any other contract, SLAs expire after a certain period. When this happens, it’s up to you whether to continue the business relationship with the vendor. A solid SLA monitoring system will let you know well ahead before the contract expires, so you can weigh factors such as:

  • How much you’re paying versus what other services charge
  • The quality of the service you’ve gotten during the past contract cycle
  • How many (if any) breaches of service the vendor has incurred
  • The level of support they’ve provided in the case of breaches

All this information should be easy to access with a comprehensive SLA monitoring system. When you put together the relevant data, it becomes easier to decide whether a vendor is providing you adequate service.

3. Comprehensive SLA Reports

Unless you’re constantly monitoring SLAs and breach reports, it can be hard to gauge if the vendors you use deliver an acceptable level of service. As a decision-maker, you rely on periodic reports to update you about any problems the business might be facing.

An SLA management system should include reporting functionality with in-depth analyses of cost, past incidents, and metrics related to each vendor.

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Armed with this information, you’ll have a complete understanding of how valuable each service provider is to your organization. More importantly, you’ll know when to upgrade or downgrade services, when to reach out to talk about ongoing issues, and whether it makes sense to look for alternatives before your next renewal.


Your business probably relies on multiple software and service vendors for day-to-day operations, meaning you likely already deal with several SLAs. With an SLA monitoring system, keeping track of vendor requirements and obligations becomes simpler. This can translate to less time spent dealing with technical issues on your end and better service for your end users.

If you’re in the market for an SLA management system, there are three features to look out for:

  1. SLA monitoring and breach notifications
  2. SLA renewal notifications
  3. Comprehensive SLA reports

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