Service Level Agreements: Definition, Levels & Importance to VoIP
Corey McCraw is a staff writer covering VoIP and Unified Communications. Corey has over a decade of experience in marketing, tech writing, and corporate communications and has even penned content for the former First Lady Michelle Obama’s Let’s Move initiative.
Marianne is a staff writer at Fit Small Business who covers business phone services, VoIP, and video conferencing tools.
This article is part of a larger series on VoIP.
A service level agreement (SLA) is a formal contract between a service provider and the customer outlining performance expectations, quality metrics, and consequences for violations. It is widely used in IT-related areas like the internet, business cloud communications, and managed services. Service level agreements manage customer expectations and define specific remedies if the provider fails to meet its obligations.
In this article, we answer the question, “What is a service level agreement?” and discuss its importance when selecting a voice-over-internet-protocol (VoIP) service provider.
Importance of an SLA
A service level agreement is a critical part of any business procedure as it protects both the customer and service provider from possible disputes. It ensures both parties understand their requirements, responsibilities, and the entire scope of the agreement. Here are reasons having an SLA is important when committing to a service provider:
- Protects both parties: The SLA protects each party from unnecessary losses and ensures non-compliance is prevented or penalized. For example, a client may demand a fine if the provider doesn’t deliver the minimum service quality stated in the contract. The vendor is protected against excessive demands or improper claims made by the client.
- Establishes service standards: An SLA provides clear and measurable standards to determine whether the provider is fulfilling its obligations. When specific metrics are being met, this indicates the provider is committed to quality service delivery.
- Manage client expectations: A well-defined SLA manages client expectations by thoroughly stating the service to be delivered, how it will be delivered, and the expected quality. It eliminates ambiguity between customer expectations and what the supplier understands.
- Defines consequences for unmet obligations: An SLA features a clause stating the course of action or consequences if obligations aren’t met. It declares an agreement that seeks to compensate one party for loss caused by the other party. It may take the form of legal penalties, monetary compensation, or the ability of a client to terminate the contract.
Types of Service Level Agreements
Now that you understand what service level agreement is and its importance, let’s explore the different types. SLAs are mainly classified into three categories—customer, internal, and multi-level SLAs. Below we discuss how each one is utilized in different situations.
Also called an external service agreement, the customer SLA is the most common type of service level agreement. It defines the level of service to be delivered by a third-party provider to an individual or group of customers. The contract includes the pricing details, each party’s responsibilities, escalation procedures, and terms of cancellation.
An internal SLA is between two separate teams within the same organization. For instance, the sales department might collaborate with the marketing department for lead generation efforts. The agreement contains service targets, dictates reporting, and ensures that both teams are working together to meet the company’s goals.
This type of SLA divides the contract into different levels to cater to the specific needs of multiple end-users. This is often utilized by providers whose customers pay for different tiers of service plans (e.g., Basic, Premium, or Enterprise). It enables clients to customize the agreement and add several conditions to create a tailor-fit service.
Examples of VoIP SLAs
SLA examples vary depending on the industry and service offered. In VoIP services, providers create SLAs outlining the minimum service a client should expect based on the plan purchased. Here are illustrative examples of VoIP service commitments included in SLAs.
VoIP providers use percentages to convey their network availability to clients. In business phone systems, the most common standard for uptime is 99.999%, or the so-called “five nines,” meaning the network stays operational 99.999% of the time. Every additional nine a provider adds to their uptime score is equivalent to a slight increase in reliability and costs.
Call quality is a primary consideration for anyone looking to utilize a VoIP system. For calls to be successfully transmitted, everything must work in conjunction, from router settings, endpoint hardware, and network connection. That is why quality assurance should be communicated in the SLA to ensure the best service possible for clients. For example, a VoIP platform should include a status portal for detailed information about potential issues.
It is common for phone systems to provide an estimated response time for customer support, as clients consider it essential when inquiring about troubleshooting or account configuration. If a VoIP provider promises to provide 24/7 customer service, clients should be able to receive the assistance they need at any time. The SLA should also state the type of customer service channel used, whether via phone, email, or chat.
VoIP solutions, like any cloud-based service, are vulnerable to security risks. VoIP providers work hard to ensure the information stored and passed through their servers is safe from malicious attempts. In this case, the provider should define the types of security protocols deployed to secure their clients’ digital assets and guarantee peace of mind. These include industry compliance, encryption measures, access controls, and penetration testing.
Different Levels of Uptime SLAs
Service uptime is a critical factor when considering a hosted VoIP phone system. Uptime numbers should be as close to 100% as possible to ensure lesser chances of service disruptions and potential outages. Take a look at our detailed uptime breakdown below to determine how uptime is measured:
Downtime Period | |||||
|---|---|---|---|---|---|
Uptime SLA | Daily | Weekly | Monthly | Quarterly | Yearly |
99% | 14m 24s | 1h 40m 48s | 7h 18m 17s | 21h 54m 52s | 3d 15h 39m 29s |
99.9% | 1m 26s | 10m 4s | 43m 49s | 2h 11m 29s | 8h 45m 56s |
99.99% | 8s | 1m | 4m 22s | 13m 8s | 52m 35s |
99.999% | 0s | 6s | 26s | 1m 18s | 5m 15s |
VoIP Providers With High Uptimes
Achieving a high SLA uptime is no easy feat for a cloud communications provider. Fortunately, industry leaders have continuously invested in robust architectures to maintain a higher level of reliability for their clients. Here are the top business phone providers that provide the best uptime percentage in the industry:
VoIP Provider | Uptime Percentage | Monthly Starting Price (per User) | Key Features | Learn More |
|---|---|---|---|---|
 | 99.999% | $30 |
| |
 | 99.999% | $30.95 |
| |
 | 99.999% | $28 |
| |
 | 100% | $23 |
| |
 | 99.99% | $32 |
|
Are you in the market for a voice-over-internet-protocol (VoIP) service? Our guide about VoIP service costs will help you find the right subscription plan to invest in based on your needs and budget.
Frequently Asked Questions (FAQs)
Can I track the uptime of my phone system?
Yes. VoIP providers offer a service portal where you can view the uptime history and status updates of your phone system. This ensures a service provider is committed to transparency about the status of its VoIP platform. Plus, it enables users to see if the VoIP system actually meets the uptime guarantee from its SLA.
Do VoIP providers allow room for negotiation on SLAs?
Yes. VoIP providers like RingCentral enable clients to tweak the SLA for specific business requirements. However, it is recommended you request changes during the early stage of the transaction process, particularly at the request for proposal (RFP) stage. This way, both parties are aware of what is expected upfront.
What should a service level agreement include to ensure a VoIP provider has high uptime?
When evaluating the reliability of a VoIP provider, consider the following factors: availability guarantees, security measures, disaster recovery, and business continuity plans. Also, check its redundancy methods like multiple carriers or points of presence, as these ensure backup options in case the internet goes out.
Bottom Line
A well-written SLA plays a critical role when committing to a service provider or outsourcing contract. While SLAs vary across industries, it’s important to understand the basics of SLA to know how it will affect your relationship with your VoIP provider. Although they can’t control every aspect of your operations, a contract like this will keep them accountable and take necessary measures to provide the best quality service possible.
