Service Level Agreements - A Bit of History
The primary objective of an organization's Information Technology (IT) department is to provide computing services that meet the business requirements of its users. To achieve this, IT needs to understand those requirements and translate them into its own business objectives. Against those objectives IT can measure the service delivered as well as its own capability and performance in providing the services. To enable this to occur, the critical services and level of delivery required must be identified and agreements reached. Typically this is done by Service Level Agreements (SLA's), which are formal written contracts developed jointly by the provider of services (IT) and its users.

SLA's between users and IT have been around for many years, sometimes resulting from an audit requirement but often filed away and almost forgotten. The users may not even remember that such a document exists and the performance of IT may not be governed by it. However, for the SLA process to work, each agreement must define the current relationships, responsibilities, and expected performance of the organization's information systems and services for its users. They are living documents; that is, they are not cast in stone because conditions driving them are frequently changing and must therefore be reviewed and kept current on an ongoing basis.

Service Level Management is much more than writing SLA's. The process, once undertaken with commitment, will change the way that IT views the user and in its turn, puts IT in the spotlight. Even from the outset, when there are only one or two SLA's in effect, there are obvious benefits to be derived from the regular communications, reports and reviews of the services. As more information is gathered on business profiles, transaction rates, response times and deadlines, areas such as capacity planning, chargeback and performance analysis are able to track and predict resource usage much more accurately. The successful implementation of Service Level Agreements will require total organizational commitment.

Service Level Agreements - Why Use Them?
Frequently IT managers say that they know when their users are really happy by the number of phone calls they receive. No calls mean a satisfied customer since they don't call to complain about poor service. Often this has become the de-facto measure of customer service. In reality, it is typical that the IT manager understands little about their customers except for the ones who were willing to pick up the phone. In this scenario, it is difficult for IT managers to realistically measure the general level of satisfaction or dissatisfaction with the service provided by IT.

From the customer viewpoint, their expectations of what service really is and how quickly IT could respond, of what levels of service were reasonable, are rarely based on the business realities of managing a technology infrastructure.

This lack of understanding on both sides means that objectives and goals are not defined. As a result, the customer is dissatisfied with the service and typically has either looked elsewhere (PC's, departmental computing or outside services) or escalated the pressure on IT to deliver. Both of these approaches are costly to the enterprise. When unmanaged decentralization occurs, there is duplication of services and the benefits of the economies of scale of centralized management processes are lost. When unmanaged pressure is placed on IT, there may be an increase in costs and/or a loss in productivity as hardware and people are thrown at the problem.

So, very simply, the purpose of the SLA is to identify the shared goals and objectives of the concerned parties.
     • Information Technology - "We agree to provide you this level of service based on agreed-to set of guidelines"
     • Customer - "We agree to abide by your guidelines in anticipation that you will provide us this level of service"

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Service Level Agreements - What Are They? The literature about Service Level Agreements (SLA's) defines them in a number of different ways, but most succinctly, they are agreements between the supplier of service and the user of that service that define:      • The availability of the service to the user      • The performance target of various components of the user's workloads      • The bounds of guaranteed performance and availability      • The measurement and reporting mechanisms      • The cost of the service (where cost is an agreed to component of the SLA) There are many different types of SLA's, ranging from the very basic broad application of performance and availability standards to precise, focused SLA's that vary from user to user in the same enterprise. For most complex IT infrastructures, with multiple computing environments, various users with differing requirements, "mission-critical" workloads, time dependent workloads, a general-purpose SLA has little meaning and provides little benefit. The premises behind a more complete Service Level Agreement are:      1) The IT department provides multiple services all of which should be listed      2) The using organizations have different demands for services (not all organizations need all services)      3) The using organizations have differing requirements for the same service at different parts of the day      4) There is value associated with faster, more desirable service as well as when that service needs to be provided      5) The cost of the system is shared by the users of the system; cost is allocated according to when and how the system is used

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Additional Information
Visit www.itsm.info to learn about ITSM, IT Infrastructure Library (ITIL), and SolutionMethod™ (a Policy Based ITSM Approach). In addition, you can download free and informative white papers, questionnaires, and service briefs. This includes more in-depth information on the topics presented in this newsletter.

To learn how RL Consulting can assist in achieving IT Service Management goals and our full range of solutions:
Contact us at RL_Consulting@itsm.info or phone us at 602-996-6830

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Volume 6 - August, 2002
This newsletter and the information contained herein is maintained by Rick Leopoldi and property of RL Information Consulting LLC.