The SQL Server service packs are usually applied to the server and it can easily tell what version of the softwares are running by either issuing a T-SQL command or by SQL Server Management Studio / SQL Server Enterprise Manager. Needless to say, the client tools also need to be updated to ensure the latest release and also to ensure that all features still work properly. May be there are older versions that will not work properly.
The install process works similar way as server updates while you want to apply the service pack or SP, Remember, here is only need to update the client tools which should be the only option when installing the service pack update. Also take the all latest backups before doing the job. For better concept and helpful guide is here.
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