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What's the difference between an outsourcing agreement and a service-level agreement?

What's the difference between an outsourcing agreement and a service-level agreement? If they are different, what are the defining elements of each?

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An outsourcing agreement is a business contract between a service provider and a service receiver. It contains all of the terms and conditions of the business relationship, including service provider fees, services to be covered, etc. The service-level agreement, or SLA, is a component (perhaps an appendix item) to the outsourcing agreement. The SLA governs the quality and availability of the service, covering areas listed in the response to the prior question.

In an enterprise organization, the legal department is more focused on the outsourcing agreement while the IT department is more focused on the service-level agreement.

This was first published in March 2006

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