The SLA Trilogy – Success factors for defining SLA’s

The final slice of SIAM on Service Level Agreements In The SLA Trilogy 

Part 3 – Reporting and (re)aligning

Slices of Service Integration & Management From ITSM industry experts

In part 2 we considered two critical success factors (CSF’s) for SLA’s within a SIAM ecosystem:

CSF #1 – Understanding the ‘Big Picture’

CSF #2 – Defining accountability and responsibility for SLA’s

But there are many more to consider, and in this slice a couple more.

CSF #3 – Measure and report on what is useful and valuable to the customer (end to end service)

How SLA’s and KPI’s are written must be business led. For example, if your business manufactures motor vehicles that are shipped to dealerships across the globe; the headline KPI’s, even for IT service providers, must be business focussed such as: ‘Service availability to manufacturing teams will enable a minimum of 50,000 cars to be produced per week’ and ‘Inventory control systems must provide accurate information on component stock levels, to ensure that 99.7% of component deliveries to production line/manufacturing can be successfully fulfilled each day.

  • In a traditional environment, service targets are often focused around system availability of a single service, or the number of incidents and changes that were being managed.
  • With multiple providers in a SIAM ecosystem, this dynamic changes: no longer is a single provider KPI indicative of end to end service value. In fact, often one KPI might be easy to achieve but because of a dependency on another provider achieving a different KPI, it does not mean that achieving that target equates to the customer’s satisfaction.
  • This is known as the watermelon effect: a report is ‘green on the outside, red on the inside’, the service provider(s) meet individual targets, but the end to end service is not meeting the customer’s requirements because of lack of joined up measurement and reporting (i.e. ‘end to end’).

In part two we talked about a big picture and this ‘big picture’ view allows a service to be measured end to end, whilst understanding the individual elements involvement. KPI’s supporting the SLA need to be in place for all providers individually but underlying this, however, is the complex myriad of information and communications technology components from the desktop through to the data centre, managed by the individual service providers, each of which contribute to the overall performance.

There are two main concerns for the service integrator:

  1. Making sure all the links in the chain have aligned service targets in place
  2. Ensuring all providers understand their obligations, dependencies and constraints associated with other service elements.

It is often a good idea to define Operational Level Agreements and make use of Collaboration Agreements to support the contracts and ease understanding of the day to day running requirements without constant reference back to contracts. To support collaborations Service Providers should be incentivised to actively collaboration with other providers rather than operating as a silo.

CSF #4 – SLA’s need to be flexible and aligned to changing business requirements

These days ‘agility’ is a buzz-word that many organizations are using.

  • It means that changing business priorities and structures need to be translates into quick (‘agile’) delivery of new and changed IT services. In SIAM environments, this concept extents to the service providers in the ecosystem, where the provider model needs to include a certain ‘fluidity’ (sometimes referred to as ‘loose coupling).
  • There will be a requirement on all providers to be able to flex based on changing business need. As customer requirements evolve, providers move in and out of the support model and take up service elements in a more elasticated method’ (I can’t think where I heard this phrase but I like it).

The whole construct of service contracts is changing with focus on moving from say a 5-year contract to a 3+1+1 model to provide shorter or more flexible commitments (without losing contractual stability and the base for a long-term collaboration).

  • KPI’s and SLA’s also need to be adaptable but still a viable option for the provider and balancing the risk vs. benefit for the customer. There are positives and negatives to this approach for both provider and customer (that whole topic could make for another blog). For example, this approach allows the creation of positive commercial tensions (i.e. competition, each provider ‘proving’ their value), however it can also lead to constant changes with the service provider landscape, which can be disruptive. Additionally, a customer may lose out on engaging with some providers because they can’t or simply won’t work under such contractual conditions.

Ultimately devising effective service commitments within a SIAM ecosystem comes down to aligned objectives and a culture of shared success. It is the result of a set of providers collectively owning objectives that directly relate to the success of the business.

Going back to my car production line analogy: if you’re a car manufacturer then your focus will be on moving cars from production line to dealership to people’s garages and the service SLA’s need to support this outcome.

Unquestionable KPI’s and SLA’s, which help support specific activities such as call handling on the service desk, or percentage of failed changes are important from services perspective but SIAM is concerned with the bigger picture view which only works when every layer of the SIAM ecosystem from customer organisation to service integrator and service providers understand what the business does and how they help to support those outcomes.

econsultant-headshot-michelle-major-goldsmith-new eConsultant Simon Dorst

There are many other considerations, we have shared just a few but we’re hopeful we’ve given you food for thought regarding critical success factors for creating SLA’s within a SIAM ecosystem: 

Michelle Major- Goldmith & Simon Dorst