There are three types of service level agreements that can be documented. Before defining ITIL service level requirements and agreeing service levels via ALS, the most appropriate SLA structure must be designed. Depending on the services available to a customer or business, an SLA structure corresponding to the objective is designed. Service level agreements are usually signed during the ITIL service design phase of ITIL`s lifecycle. Service Level Agreements (SLAs) are contractual terms that document the service standard agreed between the bank and the service provider and the quality of service. SLA is an important element in the implementation of a strong outsourcing contract. The ALS ensures that the institution receives the required benefits at the required price and standard. ALS is an essential part of managing the financial and operational risk associated with outsourcing contracts. It can also be one way to help reduce risk. Defining the unit of measurement and service space for the chosen level reduces the risk of service, as it becomes a priority area and is assigned as the service provider manager. Maintaining service level agreements is part of service level management. Each time a service is changed or the service level objective of a service change, the service level agreement must be reviewed and revised.

The new level of service agreement must reflect changes to the service or service level objectives. Therefore, the management of service level agreements is an important part of the continuous improvement of the ItIL service. The main objective of ALS is to define and explain performance expectations and establish accountability. It is therefore essential to balance the need for specific measurement standards with appropriate adaptive capacity. A typical trap is inadequate monitoring or “micromanagement” of the service provider, which can make it more difficult for bank staff to monitor the service provider relationship and monitor ALS. A well-designed ALS will identify and reward good service, or at least recognize it. In addition, the measurement structure — or performance metric — is displayed to detect bad services and initiate revision or retraction rules as approved. In today`s outsourcing environment, incentives or penalties within the ALA can be an effective tool for service management.

If the services received do not meet the requirement, direct results, such as lower compensation or credit, would be followed by future services. For example, you are a customer of a bank and the bank provides you with services. A service level agreement between you and the bank describes the services provided and the levels of service to which they are provided. For example, you can withdraw money at an ATM with the bank, and the transaction does not last more than 10 seconds. This is an example of agreement on service levels and is part of service level management. The second type of service level agreement structure is customer-based ALS. A customer-based ALS is an agreement with a customer that covers all of that customer`s services in Iron Mouth.