SLOs and Error Budgets for Business Stakeholders

Published On - September 13, 2025

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What happens when a product doesn’t work exactly as expected—not catastrophically, but just enough to slightly disrupt the user experience? Most users might shrug and move on, but for businesses, these small discrepancies can accumulate over time and affect customer satisfaction, retention, and trust. To manage such trade-offs effectively, modern organizations use Service Level Objectives (SLOs) and Error Budgets. These concepts, while grounded in Site Reliability Engineering (SRE), hold immense value for business stakeholders too.

Understanding the Basics: What Are SLOs?

SLOs, or Service Level Objectives, are measurable targets set for system reliability and performance. They are not just technical metrics buried in a dashboard—they represent the agreed-upon expectations between engineering teams and the business.

An SLO might state that “the API will respond in under 300ms for 99.9% of requests over 30 days.” When you define these targets, you’re saying: “This is the level of performance our users need, and this is what we’ll commit to delivering.”

Why does that matter to business stakeholders? Because every product or service has a threshold beyond which customer trust begins to erode. Knowing where that line is—and how often it’s crossed—is critical for strategic planning and customer communication.

The Role of SLIs and SLAs

Before diving deeper, it’s worth clarifying two related terms:

  • SLI (Service Level Indicator): A quantifiable measure of system performance, such as uptime, error rate, or latency.
  • SLA (Service Level Agreement): A formal agreement, often legally binding, between a provider and a customer that typically includes consequences for not meeting specified objectives.

Think of it like this: SLIs are the instruments you measure, SLOs are the targets based on those measurements, and SLAs are the contracts about meeting those targets.

Why Business Leaders Should Care About SLOs

Traditionally, reliability metrics were the concern of engineers. But this view is shifting, as business stakeholders begin to understand that system performance is directly linked to customer retention, satisfaction, and revenue.

Here’s why SLOs should matter to you:

  1. Customer Experience: A slow loading app or a flaky checkout process frustrates users. SLOs help quantify that pain so it can be addressed systematically.
  2. Product Roadmapping: Knowing how close systems are to critical failure thresholds helps product managers and executives make informed investment decisions.
  3. Risk Management: With well-defined SLOs, you can assess and mitigate reliability risks more proactively instead of reacting to every incident.
  4. Cross-team Communication: Using SLOs as a common language facilitates better conversations between business and engineering teams.

What Is an Error Budget?

Now that you understand SLOs, let’s talk about one of their most powerful business applications: the Error Budget.

Imagine your SLO defines 99.9% uptime over 30 days. That means the service is allowed to be down or degraded for 0.1% of the time, which translates to roughly 43 minutes per month. That 0.1% is your Error Budget.

The concept is elegant: rather than naïvely striving for “five nines” (99.999%) reliability—which can be exorbitantly expensive—organizations accept a certain threshold of failure and use that leeway intentionally. If you exceed your error budget, it’s a clear signal to pause risky launches or features until stability is restored.

The Strategic Value of Error Budgets

Error budgets are critical for orchestrating the delicate trade-off between innovation and reliability. Business leaders often want to ship new features quickly, and engineers want to ensure those features don’t compromise system stability. An error budget gives both parties a data-backed way to make decisions.

How can businesses put this into practice?

  • Operational Guardrails: Error budgets help determine when it’s safe to deploy or when releases should be halted temporarily.
  • Prioritization: If error budgets are consistently burned through, it points to a clear need to prioritize tech debt or improve existing systems over launching new capabilities.
  • Customer Communication: Knowing when and how often limits are being breached provides valuable insight for proactively communicating with customers.

Where Business Meets Engineering

One of the most misunderstood aspects of SLOs and error budgets is that they are not just engineering metrics—they are strategic levers that bridge technical performance and business outcomes.

Let’s consider an example. Suppose your streaming media service has an SLO that 99.95% of video streams should start in under 2 seconds. Over the last two weeks, the team has burned through 70% of the error budget. At this point:

  • Engineers may propose delaying a major feature rollout.
  • Product managers may temporarily shift focus to performance optimizations.
  • Customer success may prepare messaging for potentially-impacted users, preemptively heading off complaints or churn.

This coordinated response is only possible when *everyone* understands—and acts according to—the shared language of SLOs and error budgets.

Common Pitfalls to Avoid

Embracing SLOs and error budgets comes with growing pains. Here are a few common challenges that businesses should watch out for:

  • Setting Unrealistic Targets: If your SLOs are too aggressive, you’ll constantly exceed your error budget. This undermines their utility and burdens engineering teams with firefighting.
  • Misaligned Priorities: If business stakeholders push feature releases regardless of the state of the error budget, it defeats the purpose of the system entirely.
  • Lack of Education: For SLOs to be effective, everyone from executives to customer support needs to understand what they mean and how to use them.

Defining ‘Reliable Enough’

Reliability doesn’t mean perfection. In fact, making something 100% perfect is often cost-prohibitive and unnecessary. The beauty of SLOs lies in helping organizations define what ‘reliable enough’ means for their specific customer base and business goals.

Whether you’re running an e-commerce site, a healthcare platform, or a productivity app, setting realistic expectations and measuring against them is the key to maintaining quality without stifling innovation.

Getting Started with SLOs and Error Budgets

If you’re a business stakeholder keen to start using SLOs and error budgets in your organization, here are some starting points:

  1. Collaborate with Engineers: Work with technical leaders to identify customer-impacting metrics and agree on thresholds.
  2. Start Small: Implement SLOs for a few critical services before rolling them out company-wide.
  3. Review Regularly: Institute a cadence for reviewing SLO compliance and error budget usage—ideally as part of planning or operations reviews.
  4. Use Dashboards and Alerts: Visualizing real-time performance against SLOs improves transparency and accelerates decision-making.

Conclusion: Driving Business Value

SLOs and error budgets provide a structured way to balance customer expectations, system performance, and the pace of innovation. They give business leaders a direct line of sight into how infrastructure and product decisions affect outcomes like revenue, customer satisfaction, and market competitiveness.

By making these concepts a cross-functional priority, you position your organization not only to build more reliable systems, but also to make smarter business bets. In today’s digital economy, that can be the difference between leading the market—or falling behind.