According to Wikipedia, an SLA is:
“A service-level agreement is a negotiated agreement between two parties, where one is the customer and the other is the service provider. This can be a legally binding formal or an informal “contract” (for example, internal department relationships).“.
SLAs is a hot item in IT, and is given much weight in the organizational framework called ITIL.
Almost all IT directors I talk to rely heavily on SLAs or blame the lack of proper SLAs for lack of success.
But seriously, do you have an SLA with Google? With Facebook, Twitter or the scores of Internet services that you use personally? No – and if you are unhappy, you simply find another solution or service provider.
An IT service provider would be wise to simply scrap the SLA or any contract that seeks to bind the customer. Instead, let the customer be free to choose and move to another vendor if they feel like it. In that way, the service provider will have to be constantly performing better than the competition. And that is the best solution to keep the customers.
Instead of locking the customer with contracts, service the customer like no one else.
No contracts, no lock-in and you have no choice but to become and be the best.
Without even intellectual property protection, you would have to rely on pure and excellent service to retain your customers.
Customer lock-in mechanisms makes for laziness, dwindling creativity and thus ironically opens the door to better service providers.
SLAs are only warranted where the customer are not free to choose another provider, such as when the business strategy dictates the business units to only use the internal IT department.