Whenever a purchase is made, companies or individuals have expectations regarding the performance of the purchased good or service. Ideally, every purchase works 100 percent of the time that the user expects it too, but such service is rarely achieved. For most purchases, having the item in a nonworking condition is inconvenient, but not threatening to the long-term success of a company. A copier that breaks down can cause distress, for example, but is not likely to lead to customers seeking alternative vendors. Such is not the case with information technology services. As such services have become more complex and integral to a company's operations, they have become more critical to the company's survival. Whether IT services are provided by an in-house IT department or outsourced to a service provider, downtime in the IT area of a company can be devastating to a company's long-term survival. Yet the trade off of cost and reliability can be significant, so it is necessary for companies to determine what constitutes acceptable levels of service, and which levels are unacceptable. This has led to the development of the service level agreement, which details the acceptable levels of performance, remedies if those levels are not achieved, and can even outline how the transition from one service provider to another will take place. This research examines the service level agreement, including the factors that result in a successful agreement, and considers the use of such agreements when an internal IT group provides services.
EXPLANATION OF SERVICE LEVEL AGREEMENTS
In their most simple form, service level agreements are provisions within the service contract that provide for minimum levels of network availability. If the service provider does not meet those levels, the buyer is entitled to some type of remedy (Wilson, 1999). However, service level agreements can be much more than just a provision on the larger service con...