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How to Set Up Successful SLAs

Setting up strong Service Level Agreements is critical to ITSM, but it's not an easy job. Some analysts and consultants offer tips on how to do it right.
Mar 13, 2006

Sharon Gaudin

The Service Level Agreement (SLA) is one of the most critical parts -- if not the key element -- of IT Service Management.

But as important as they are, they also can be complicated to set up. And some say they can be tricky to get right. However, when administrators do get them right, those SLAs not only help IT become more efficient, they enable IT to help the business.

And that is the basic goal of IT Service Management (ITSM).

''A good agreement can do a lot. A good agreement will reduce outlays of capital and outlays for operations,'' says Rick Sturm, president of Enterprise Management Associates, Inc., a Boulder, Colo.-based IT research and analyst firm. ''You can make it complicated, certainly, but it doesn't have to be. It shouldn't look like a Manhattan telephone book. It should be short and concise and cover a single service, and have a metric that covers user experience.

''But they don't make it easy for themselves, so there they sit,'' adds Sturm. ''They could have these nice agreements that make their lives easier, but they don't.''

An SLA is created when IT and business sit down and hammer out a contract -- this is what business can depend on receiving from IT, whether it's availability, response time to a problem, or speed of service. It's also a tool for IT to show business executives exactly what the department can do. IT enables all of these business functions, and here is the paperwork that shows that they are living up to those obligations.

ITSM is all about helping IT work as part of the business, instead of as its own island. It takes IT professionals out of the confines of the back server rooms and puts them squarely on the front lines of the business.

Service Level Agreements set the standards that IT needs to live by as they work as part of the overall business team.

Getting Started

The problem is exactly how to set them up. Analysts say many IT managers are hesitant to dive into SLA projects, and even ITSM in general, because they fear drowning in a flood of extra work and wrangling with other business departments. Even for an experienced ITSM pro, getting started can still be a daunting task.

Here are some steps to take:

  • Deal with the Basics -- Sturm says before anyone even starts talking about SLAs, IT administrators need to take care of the fundamentals. That means making sure you're monitoring the services that IT is offering. Never go into an SLA meeting with the suits without metrics in hand.

    ''How can you make commitments about service level delivery if you're not monitoring the service or the components, like the routers, and the servers, the applications,'' says Sturm. ''In a typical IT organization, they are going to be ready when they are able to measure availability of the service delivery mechanisms and detect problems when they occur, or even better, before they occur. They also have to have the ability to track and measure any outages and then have the ability to measure performance.''

    Sturm says administrators should try to measure end-to-end response time. It's not easy but it's a great metric to have in hand.

    For example, a clerk in an order-entry department sits down at his desk and starts taking order information. He fills in the needed information and hits 'enter'. IT needs to be able to measure exactly how long it takes from when the worker hit 'enter' to when he receives an acknowledgement that the order went through successfully.

  • Think it Through -- Patricia Bramhall, president of Tydak, a Thousand Oaks, Calif.-based consultancy, says IT also needs to do some serious thinking before they get too far into the process.

    ''Think about the overall objective,'' she says. ''Think about the staff that you have. What kinds of services can you provide and monitor? Really do some thinking.''

  • Know Your Audience -- Don't walk into a room with a business or department executive without first understanding the work that he or she is dealing with. Know something about who you will be talking to, says Nick Schneider, a principal consultant with Pepperweed Consulting LLC, an Indianapolis-based IT management consulting firm. Know when their busiest days are. Know what applications you service for them. Do your homework.

    ''They should be familiar with different business operations that are going on and what are periods of time that are important to this department -- a month-end close or a weekly batch process or maybe Wednesday afternoons when reports are run. Know their cycles... Doing your homework also means you know you can't take an application down on Wednesday afternoon to work on it because that's when they need it to run their weekly reports. What's a good change window for them?

    ''If you can say, 'Look, I know you're busy Wednesday afternoons so I won't be making changes at that time, that tells them you care about their work and you're looking out for their best interest,'' he adds.

  • Tackling the First One -- There's some disagreement among the analysts and consultants about how to dive into that first agreement. Some recommend taking on the toughest problem that IT has. Others, however, say start out easy so you can get an easy win under your belt.

    Schneider says he sometimes recommends figuring out what application or business department has been causing the most grief in the company. Find it. Then fix it.

    ''Find the business pain point and focus on that first,'' he says. ''If the business is feeling pain, they'll make [fixing it] a priority and they'll really work with you.''

    Sturm, on the other hand, advices picking off the low-hanging fruit first.

    ''I recommend starting with a low-key application in a non-critical area, with people who are easy to work with. You don't want people who are inflammatory and always eager to take a shot at IT,'' he says. ''First of all, you want to guarantee success right out of the gate... You want a win right out of the gate. You want something where you can expect it not to be escalated to the boardroom if there are any glitches.

    ''Let's say you put in additional software and it hiccups and causes a system outage that lasts a few hours,'' Sturm adds. ''You don't want that to be L.L. Bean's order-entry system on the weekend after Thanksgiving. Maybe you start with HR's system for tracking retired employees.''

  • Keep it Business Focused -- Sturm also recommends that IT keep the meeting conversation as business-focused as possible. Don't talk about packet losses. Show them data that is directly related to their job. Talk about how many orders are run through the order-entry system during an eight-hour shift. Compare that number to the same time period a year ago. Five years ago.

  • Keep it Realistic -- Bramhall notes that it's important to keep any negotiation based in reality.

    The head of one department, for instance, may be upset that it takes two weeks between the time he asks for a new PC and when one is set up and running in his department. She may want it in two days. You can realistically buy the machine and have it set up in a week. Tell them you can change that time period but it's going to cost them. Are they willing to pay more out of their budget for the faster delivery of those PCs?

    Maybe not, and that will change the whole discussion.

  • List priorities -- Everything can't be top priority. IT will have to work with business managers to figure out the must-do-now hierarchy.

    Bramhall advices IT managers to compile a list of everything they do for each department. When the business exec starts arguing that she needs that new PC in two days, remind her that when she gets a new employee, she also needs to have voicemail set up, as well as a company email account. That employee also will need policy and security training.

    ''Talk to them about all the things that they need,'' says Bramhall. ''Everything can't be a top priority. We need you to say what's really important.'' If you don't know what's important to each different department, you'll never know how to satisfy them, she adds.

  • Don't Take on the Troops -- Schneider warns that an IT administrator should never call a meeting with 10 business managers and then try to convince them of something en masse. ''If you go into a meeting where no one is on board with you, they will feed off each other and it will be chaos. You need to have worked with each individual around that table already to get them on board. That group meeting is just a formality.

    ''I gotta imagine that with any kind of peace process, it's a similar thing,'' he adds.

  • Be Able to Deliver -- Both Bramhall and Sturm say one of the biggest mistakes that IT administrators make is to offer promises that they can't keep. Never sign an agreement that you can't back up.

    ''It certainly happens and it happens knowingly,'' says Sturm. ''In some cases, users will bully IT into agreeing to certain things... Sometimes IT just gets tired of it hanging over their heads. It's a recipe for disaster.''

    Setting up Service Level Agreements is a big job, but Bramhall says it's worth the time and effort.

    ''It's worth it for accountability, and it's worth it for the idea that IT can say, 'Here's what we do. Here's the value we bring to the company.','' she says. ''It also shows that you're not afraid to be measured. 'I said I'll deliver this service in this amount of time and I will.' IT tends to get a black eye for saying we'll deliver something and then we don't -- or at least the perception is that we never deliver.''