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It should detail the customer expectations, measurement of the service, calculation of the metrics and outline the process for correction and reporting and provide for remedies in the event of failure.
An SLA may be external or internal but the key is to get all your information up front, including your business requirements so you can draft a document that will reflect the expectations of the customer. The amount of effort you expend on an SLA is dependent on the complexity and details of the SLA.
Monitoring, reporting, renegotiating and adjusting the metrics should be an ongoing process.
You expect your internal units to be flexible, responsive to the business climate and provide a competitive advantage to your organization, the same thing should be true of your outsourcer and the SLAs reflect those expectations.
The outsourcer has a responsibility to deliver a quality product and they should be viewed as an integral part of the overall corporate organization.
Since they are not an actual part of the organization (may be aligned on processing but not on your ultimate business goals) they need to be monitored in a co-ownership manner to ensure that the objectives of the outsourcing process and the terms of contract are being met.
That is not the tone you want to set when you are entrusting your business processing to an outside company.
The truth is that the sales cycles are long but the negotiations cycles are often too short.
Again, the cost of errors in such a project is significantly higher to you than hiring the contractor.
Conversely if you were hanging shelves in the garage, if you make a mistake the error recovery is minimal, so getting experience on projects with smaller negative potential outcomes is a reasonable decision.
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