Abstract: In current technological era, business organizations are deploying services on cloud and for impartial business objectives a concrete set of service level agreements are to be put into practice. This paper provides a novel methodology to develop effective service level agreements and we evolve towards a robust framework while mitigating inherent difficulties faced by involved stakeholders. An efficient penalty management system approach is also advocated .This approach assumes few considerations and in future this assumptions will play a vital role in construction of a adaptive service level agreement so that no conflicts of interest occur while performing business transactions. The approach presented in this paper is generic and can be applied to any business domain.
Keywords: Service, Performance, Penalty, Monitoring, Reporting.