What is Service Level Management?

In essence, SLM is a process designed to define, negotiate, and set the required quality of an IT service based on customer requirements and also to ensure agreed goals are met. In addition, SLM helps to ensure that both an IT Service provider and a customer have the same understanding and perception of an IT service, its expected features, and the way they are supposed to be delivered.

As you have probably noticed, in this series of articles, for most of the time, we refer to the ITIL methodology, especially to ITIL Foundation 3, as its standards are deeply rooted in our IT routine. However, we cannot fully ignore ITIL Foundation 4 and its different perspectives on our perception of IT Service processes. Therefore, in this article, we decided to combine these two approaches and take the best out of both to present essentials that are still in use and might help you better understand Service Level Management.


What’s the purpose?

We briefly mentioned a few functions that SLM is designed for, but let’s take a closer look at them and see how these are beneficial for IT Service Management.

  • Ensuring all parties have a shared view of the service to be delivered so that both sides can cooperate more efficiently.
  • Transferring customer expectations into specific requirements allows an IT provider to better understand the functionality of a to-be-delivered solution.
SLM team
  • Collecting and analyzing data related to service performance towards agreed targets helps to view trends, predict potential problems and prevent service disruptions.
  • Ensuring the service meets customer expectations as well as the organization’s needs by conducting service reviews contributes to a better understanding of the current situation, business perspectives, and areas for development.
  • Ensuring service improvement processes are taking place based on reviews; as a result, this helps to improve customer satisfaction.
Most common definitions
  • Service Level Agreement (SLA) is a documented agreement between a service provider and a customer that identifies both the services required and the expected level of service (ITIL V4 definition). The key word here is agreement, since SLA is supposed to be mutually beneficial.

In simple terms, SLA tells us what and when it will be available for a customer and what measurements should be applied to monitor and evaluate service performance.

However, as we all know, the process of delivering IT service is more complex and can’t come down to the relationship between an IT service provider and a customer only. Nowadays, it is impossible to imagine an IT service provider being self-sufficient and providing a service without engaging external suppliers/providers/technologies or at least internal support units. So, how do we manage this type of activity in the SLM framework?

Nonetheless, in the SLM practice defined by ITIL 4, external and internal supporting activities are simplified: they became a part of SLA (Service Level Agreement). The ITIL 3 approach comes here with help and sheds light on the topic.

  • Operational-Level Agreement (OLA) is an agreement between an IT service provider and another part of the same organization that assists with providing services.

Despite being related to internal cooperation, both an OLA and SLA are  documents that contain detailed information about the scope, roles and responsibilities, targets, and measures. These documents help to manage cooperation between internal units and ensure that the terms and conditions set out in the SLA are not violated due to the failure of supporting activities.

Examples:  Service desk, Development team

  • Underpinning contract (UC) is designed to manage and measure cooperation between an IT service provider and external vendors or suppliers to meet service level targets.

Examples: Hardware vendors, network vendors.

Despite all three types of agreements being simplified and united to SLA in ITIL 4, an OLA and UCs are still in common use.

  • Service Level Requirements (SLR) is a document that contains IT service requirements from the customer’s perspective and is later used for preparing an SLA.

In the latest ITIL version, that is, ITIL 4, SLR was replaced by a warranty (assurance that a product or service will meet agreed requirements) and a utility (the functionality offered by a product or service to meet a particular need).

  • Key Performance Indicator (KPI) helps to measure the performance of individuals, departments, or projects and whether their objectives were achieved.

Hope we succeeded in introducing you to the Service Level Management world. From now on, you shouldn’t be lost in the most common definitions. You already know what SLM management is designed for and what problems it solves. Interested in learning more? Stay tuned! The second part of the article will reveal a few more interesting topics.

customer-centric approach


  • Natalia Miniailo
  • Service Manager
  • She started her professional adventure of supporting and delivering services four years ago. She joined Craftware in May 2022. Well-built communication with people in the team and with the client is the most important thing for her. In her private life, she likes spending time with her cat and a glass of wine, learning new languages and going for walks.

Editorial study
Jarosław Kozak
Text revision
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