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Service Level Management Is The Hinge

Aug 7, 2005

ITSM Watch Staff

By Darreck Lisle

To give you a better understanding I will drill down into one of the SLAs and provide you a snap shot of the complexity introduced from the poorly written SLAs:

  • SLA XX - "The Contractor shall provide and maintain a CMDB for tracking assets."
  • Metrics - "The time to update the CMDB will not exceed a four hour window."
This is how the Configuration Management SLA looked, minus some sensitive verbiage. In a nutshell, this was the extent that the Customer could hold the Service Provider accountable for all Configuration Management efforts provided as an offering.

The first thing the Service Provider did was to place a price tag to every CI as an attribute, thus limiting the Customer from viewing the CMDB information. Consequently there was no value add for any of the other processes accessing the CMDB. In reality the CMDB was merely an Asset Library that moonlighted as a DSL for Release Management.

How well did the CMDB perform based on the mandatory SLA Report? The Configuration Manager never missed an SLA because it only took milliseconds to press the save button on his/her database.

This particular Customer didn't back down from the challenge and began to introduce tactics to combat the practice of hiding behind the SLAs. The frustrated Customer started asking questions like: "What am I paying for?" "How many assets do I have in the environment?" and "I want you to prove it to me before I pay."

To quote one senior manager, "fundamental, standardized, repeatable processes, or rather, THE LACK THEREOF, have been a sea anchor on our project for some time now. The perspective is that we (Customer and Service Provider) just don't have time to do it RIGHT, but always have time to do it OVER. For both of us to succeed, this must stop."

It should be clearly understood that either extremely tight Service Level Agreements (SLAs) are written and executed, or Customer/Contractor interdependencies are established throughout the Support and Delivery Processes. While the IT Service Providers may passionately desire that the Customer is completely uninvolved, this rarely occurs unless the Customer is ignorant, unconcerned or both.

Today, there is a realization that both parties have to work together to make sure that this contract is successful. Large amounts of negotiations, sacrifices, and retooling have gone on over the years and finally measurable SLAs are on the drawing board.

Lessons Learned:

  • SLM cannot be pigeon holed into a small piece of the RFP with little or no thought about how the entire Service Delivery Contract will be affected.
  • SLAs need to have input from both the Service Provider and the Customer to ensure that the goal of the project is achieved.
  • SLAs data must include metrics, expectations, data accessibility requirements, ownership, and escalation procedures written into the contract from the beginning.
  • The upfront cost of writing solid SLAs is far less then trying to short cut the accountability of providing quality service.
The improvements in service quality and the reduction in service disruption that can be achieved through effective SLM can ultimately lead to significant financial savings.

Below is an example of how to quantify the costs and benefits of implementing Service Level Management. It is not intended to be comprehensive. It can be populated with specific assumptions, purposes, costs, and benefits to get an example that is more suitable to the specific circumstances.

In this example, the following assumptions are made:

  • 100 employees cost $25 an hour each
  • the organization comprises 50,000 Users
  • the total number of Incidents is 50,000 per year Thanks to a clear set of agreements, the Service Desk is less troubled with calls that are not part of the services offered. This way the 100 Service Desk employees work 5% more efficiently, resulting in a gain of 100*5%*$25*24*365 = $1,095,000 a year.
Most organizations that use IT became dependent on it and if processes are not implemented, managed and supported in the appropriate way, the business will probably suffer unacceptable degradation in terms of loss of productive hours, higher production costs, loss opertunity translating into loss of revenue.

The objective is to continually improve the quality of service, aligned to the business requirements, cost-effectively. But, unless People, Processes and Technology are considered and implemented appropriately within a structured framework, the objectives of Service Management will not be realized.

The implementation of Service Management is not a one-time project, but rather a continuous process of enabling overall service improvement.

Darreck D, Lisle is Vice President and Chief Information Officer of Process Service Management Corporation (PSMC), a position that he has held since February 2004.

Darreck received Bachelor of Science degree in Information Systems along with BS in Law Enforcement Administration in support of his early career in Law Enforcement. Darreck earned his MCSE-I and several other technical certifications propelling him into infrastructure architecture, building Network Operation Centers.

In 2002 Darreck received Master ITIL certification, and has been an Independent consultant before joining PSMC, with a focus on strategic and process issues for high-technology businesses concerning customer care, and process optimization.