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what is a service level agreement if you've ever dealt with contracts you'll find there are often mechanisms built into the agreement which measure the service provider on their performance these measures are often referred to as slas or kpis in this video we'll be exploring slas also known as service level agreements however if you'd like to learn more about kpis check out the video we made on this subject on our Channel an SLA is a written agreement which defines the minimum level of service required from a service provider under a contract this differs from kpis which measures the performance of a service provider against certain targets an SLA will Define what the minimum level of services and provide a course of action for when this level of service is not met this often includes monetary implications aiming to reimburse the client for some or all of the loss incurred as a result of underperformance slas are monitored regularly ensuring performance is tracked and corrective action is promptly taken when measurement thresholds are exceeded since the late 1980s slas have been used by fixed line Telecom operators ensuring uninterrupted Network for telephone lines however since then they are commonly used in a wide variety of Industries and businesses construction included within construction contracts you'll often find slas which measure a contractor or subcontractor against certain metrics these may include defects identified complaint received productivity of work communication between parties health and safety financial reporting aborted works and construction program to name a few reporting of slas usually comes in the form of a report and is presented in a monthly or quarterly performance review between contract stakeholders if performance Falls below a minimum requirement there could be cost implications for the service provider however you may find that when performance exceeds expectations there are cost incentives for the service provider carrot and stick is a good metaphor to describe this type of mechanism it gives the service provider an extra level of motivation to ensure good performance under a contract in summary slas act as a meaningful mechanism to ensure performance under a contract is upheld enabling a client to meet their business objectives and strategies if you found this video useful please consider clicking the like button we always appreciate the support you guys give us on our videos matron a commercial hub to your business