SLA — Service Level Agreement
A Service Level Agreement (SLA) is the contractual definition of the service quality a vendor commits to deliver, plus the remedies if quality falls short. For cloud ERP, the SLA covers system availability, support response times, incident-resolution speeds, data durability and notification obligations. For on-premises ERP, the SLA usually covers vendor-side support response and patch-delivery commitments rather than uptime, which is the customer's own operations team's responsibility.
SLA components
- Availability target — percentage of time the service is operational. Typical: 99.5% (3.6 hours downtime per month), 99.9% (43 minutes per month), 99.99% (4 minutes per month)
- Measurement window — monthly or quarterly, rolling or calendar. Affects how SLA breaches are calculated
- Exclusions — what does not count against the SLA: planned maintenance, force majeure, customer-caused outages, third-party-dependency outages. The exclusion list is where the details matter
- Support response times — how quickly the vendor responds to a ticket by severity (P1 critical, P2 high, P3 medium, P4 low)
- Resolution targets — how quickly an issue is resolved or mitigated by severity
- Remedies — financial credits when SLA is breached. Typically 5-25% of monthly subscription fees, capped at the monthly bill. Almost never material relative to the business impact of downtime
- Notification — how quickly the vendor must inform you of incidents, security breaches, planned maintenance
What major cloud ERP vendors commit to
SAP S/4HANA Cloud — 99.7-99.9% availability depending on edition (Public versus Private Edition), with credits of 5-25% subject to detailed exclusion clauses. Microsoft Dynamics 365 — 99.9% availability commitment with graduated service credits and a robust public Service Health dashboard. Oracle Fusion Cloud ERP — 99.9% availability, monthly measurement, financial credits scaled by breach depth. NetSuite — 99.5% historical delivery, no published headline SLA percentage in standard contracts, financial-credit terms negotiated case-by-case at enterprise tier. weclapp, Xentral, Sage Business Cloud — 99.5-99.7% with limited credits. Always read the actual SLA document, not the marketing summary — the exclusion clauses often dilute the headline number by half.
What SLA does not cover
SLAs are narrow technical commitments. They do not cover business impact — an SLA breach gives you a credit, not compensation for lost orders or production downtime. They do not cover performance beyond a basic 'system reachable' check — slow response times rarely breach availability SLA but kill productivity. They do not cover data quality, functional defects (those go through support, not SLA), or your own integration and customisation. Companies that build their business continuity strategy around SLAs are repeatedly disappointed. Treat SLA as a minimum acceptable floor, not as a guarantee of business performance.
Negotiating SLA terms
At enterprise tier, SLA terms are negotiable. Areas to push on: (1) higher availability commitment (99.95% instead of 99.9%) with proportionally higher credits, (2) tighter exclusion definitions (limiting how planned maintenance can be scheduled), (3) stronger response-time targets at P1 severity, (4) notification obligations (advance warning of maintenance, post-mortem reports for major incidents), (5) credit caps that can grow to cover larger breaches. At mid-market subscription tier, vendors rarely entertain SLA changes; standard contracts apply. The pragmatic mid-market approach: accept standard SLA, invest in monitoring and business-continuity processes that handle the residual outage risk.
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Frequently Asked Questions
Is 99.9% availability good enough?
For most mid-market operations, yes — 99.9% is 43 minutes of unplanned downtime per month, comparable to or better than typical on-premises operations. Mission-critical processes (warehouse pick-pack, high-volume e-commerce checkout) may need higher commitments and active-active deployments at significantly higher cost. Most ERP-bearing companies can absorb 99.9% downtime through scheduling and manual fallback procedures.
What happens when SLA is breached?
Customer files a credit request via the vendor portal, vendor verifies the breach, credit is applied to the next month's invoice. The amount is typically 5-25% of the monthly fee — useful as a vendor accountability mechanism, not as compensation for downtime. Larger enterprises sometimes negotiate higher remedies tied to breach depth.
Are open-source ERP SLAs different?
Yes. Self-hosted open source (Odoo Community, ERPNext, Tryton) has no vendor SLA — you operate it yourself and the SLA is your own. Commercial-support contracts for open-source ERP (Odoo Enterprise, ERPNext Cloud) come with availability commitments comparable to mid-market SaaS, typically 99.5-99.9%.