Making IT accountable

Internal service-level agreements stipulate your obligations to corporate users.

By Jerri Ledford
Network World, 07/16/01

Service-level agreements are a requirement for relationships with service providers. These documents outline expected service levels, metrics for those levels, and penalties in the event that service levels aren't met. In short, SLAs make the relationship work.

Wouldn't it seem that the same would hold true for making the relationship between internal departments and the IT department smoother? Internal SLAs require the same legwork in determining what service requirements to measure and how. Still, many businesses are missing the advantages of internal SLAs.

Companies that don't use internal SLAs leave a gap between their business units and IT departments, says Jim Metzler, vice president of Ashton Metzler and Associates in Newton, Mass. Conversely, an internal SLA "puts the responsibility where it belongs," he says.

PHH Arval, a global provider of fleet services in Hunt Valley, Md., knows firsthand the value of an internal SLA. Tim Talbot, vice president of IT services for PHH, says his department triggered the implementation of the internal SLA. "Our view was that we needed to be like any professional outsourced provider."

PHH started small, including only the most critical applications. From there, the SLA became more and more specific. "A lot of outsourcers don't get that granular," Talbot says.

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Letting IT departments define and adhere to internal SLAs also helps other departments see their requirements from a cost vs. benefits perspective.

"An internal SLA is not a 30-day wonder cure," says Peter Brown, director of global communications for PricewaterhouseCoopers in New York. "It's more a meeting of the minds."

Brown recommends that representatives from each side of an SLA get together to discuss the particulars of the document. "Not formalized teams," he says, but representatives who can agree on what to include in the SLA.

He adds that internal SLAs are expressed in more common language than the agreements that typically are crafted between an enterprise and an outsourcer. "Ultimately, the internal SLA is a meeting of the minds as to what service is and what levels are possible to meet," he says. "A large piece of that is education and expectation setting."

For example, a marketing department may require 99.999% uptime. IT can promise to provide that if the marketing department is willing to pay for the additional redundancy that is necessary to make it happen. What often happens is that the marketing department sees how costly these demands are, then lower, but equally acceptable expectations are defined.

Start small and go from there

When you develop an internal SLA, Metzler recommends starting with one or two critical metrics and building from there. What's more, put the correct monitoring system in place to ensure you hit performance targets.

"As IT professionals, we love to go out and buy tools, and bring them home," Metzler says. "But don't get mesmerized by the selection of technologies." Choose monitoring tools that will meet your needs and be scalable enough to expand as you increase the metrics in the future.

One essential measurement that Metzler says every internal SLA should include is the unit-cost metric. This measurement helps define the cost of IT services to each internal client. A good goal is to reduce that cost from year to year.

To make the prospect of implementing an internal SLA more appealing, PHH built rewards into the achievement of service levels. Talbot says that as part of the management-incentive program, service-level commitments and achievements are monitored throughout the year.

If IT consistently meets the internal SLA during the year, IT personnel get larger bonuses. The opposite is also true. If IT doesn't meet the promised level of service, the department that suffers gets a credit for all or a portion of its IT services. This, in turn, cuts into the IT department's budget and ultimately comes out of the manager's yearly bonus.

"People certainly are motivated by their bonuses," Metzler says. "The stumbling block is that I want to write an internal SLA, but that's risky because then I am accountable."

To combat the fear of accountability, Metzler recommends piloting an internal SLA for six to nine months before publicly announcing it. This lets you learn what works and what doesn't before the rest of the company is watching.

As he points out, you're already being held accountable for the network. Why not put it in writing and make it work for everyone?