* Who negotiates SLAs in your business and what's included?
If you are an IT manager or business unit manager responsible for negotiating service-level agreements, you are not alone. A survey during a recent EMA Webinar revealed that 59% of the 32 IT executives who were polled said that IT managers in their organizations negotiate SLAs, while 35% have business unit managers handle the talks. Only 2% had attorneys deal with the negotiations and another 2% handed off the duty to third-party negotiators. Clearly busy managers are having SLA negotiation duties added to their already lengthy task list.
The EMA Webinar “Dos and Don’ts of Service Level Agreements” was presented on Sept. 22. This event included presentations by two EMA analysts specializing in service-level management, as well as material presented by an executive negotiator within HP’s Business Process Outsourcing team. The complete recording is available at the EMA Web site.
Use of SLAs has proliferated from clients asking outsourcers and other vendors for service guarantees, to internal IT departments putting forth SLAs to their business unit users. Another poll during the Webinar revealed that only 12% of respondents had not yet put SLAs in place, while half of the respondents had both internal and external SLAs. Eighteen percent had only internal SLAs and another 18% had only external SLAs. Those with both internal and external SLAs can find themselves in an interesting position if the service levels they receive from vendors do not support the service levels they must deliver to their internal clients.
One important step in establishing SLAs is to collect baseline data so that the performance standards can be set appropriately. Sixty-five percent of respondents had baseline data while 22% did not have the capabilities to collect such information. An additional 3% did not collect baseline data for lack of time. So 25% of the respondents have SLAs in place without an indication of current performance – a clear path to unintended results.
Poorly structured SLAs can lead to interesting, problematic and unintended results. One common mistake is to create too many SLAs. This can dilute the effect of the critical few drivers that most affect the business. It is a good idea to think of the three types of measurements and focus on a few critical service items that drive the business:
1. Critical Service Levels:
* Are service levels that drive the business.
* Generally have financial implications associated with misses.
* Provider must have full control of this service to be classified as critical.
2. Key Service Levels:
* No financial implications in the SLA at this level, but important to the business.
* May be elevated to a Critical Service Level under certain situations.
* Provider must have full control of this service as this could become a Critical Service Level.
3. Measurement/Indicators:
* Metrics that the provider can measure but which they do not have full control.
* These cannot become Key Service Levels.
Training and experience are required to create good SLAs. IT managers and business unit managers have a great many responsibilities and the addition of this complex task warrants extra and specific training. Check out the recording of the Webinar for the complete presentation by three experts.
