In IT service management, 'SLA' stands for Service Level Agreement. An SLA is a formal contract between a service provider and its customers, defining the expected level of service, performance metrics, and responsibilities of both parties. It ensures clarity in expectations, service quality, and resolution times for issues. SLAs help organizations manage customer satisfaction effectively and provide guidelines for service delivery. They are crucial in setting accountability and measuring success, allowing for continuous improvement in services offered. By adhering to SLAs, businesses can strengthen their customer relationships and improve service reliability.