Service level agreements (SLAs) do not need an introduction to anyone responsible for service level management. These documented agreements set the benchmarks for performance and service criteria between providers and their customers, defining the service in the broader context of the organisation. It's a straightforward way to make sure you get value from whatever service you use. And the larger the organisation, the more crucial SLAs are to them as it improves their oversight of suppliers.
A customer can then use the SLA for control, monitoring and reporting purposes. But it's here that the concept turns into a bit of a blunt tool, says ITSM software vendor 4me's CEO, Cor Winkler Prins: "A typical service management tool may tell you the uptime, the reliability, whether incidents were resolved within target, that kind of thing. But if there was an issue with one of the indicators on the SLA report, what you could not see is whether it was caused by the team taking care of the service or whether it was lower down the service hierarchy. Maybe there was a major failure: the storage environment went down or there was an issue with the database."
Such details might not interest most senior managers (more on that in a second), but those nuances become essential as you work closer to the complexities behind a service. As organisations become more reliant on complex and integrated service arrangements, an SLA should do more than merely note whether something hits its benchmarks or not. It should indicate what went awry.
"The team that is responsible for the service at the top are essentially the customers of the teams that provide storage, networking in the data centre, the database, those kinds of elements. But a broad view of an SLA won't show all that detail."
SLA v.2
A better SLA is not only relevant to end-user customer organisations. Service providers would also benefit from more granular detail around SLA performance.
Fortunately, one doesn't need to reinvent the SLA to get these new benefits. A modern IT service management (ITSM) platform should allow providers to set up an SLA for a customer, and if the customer is using the same ITSM platform, the customer and the provider should both be able to track the level of service provided.
"There are several benefits to using the same ITSM platform," Winkler Prins explains. "The service provider can define benchmarks at very specific levels, and both parties will have the same visibility of the SLA. So the provider will see what the customer sees. A customer can also make different comparisons against several providers on the same service management platform, which makes life a lot easier for managers. And a considerable benefit that I don't believe many companies get at all is proper cost visibility."
Know the real costs
This part is what will interest senior managers. Not everyone in an organisation, especially outside of IT, cares why a service failed. They just look at the performance. But they will care more about cost details.
Organisations typically use their finance system to break down their cost into the cost of labour and the assets that were acquired, such as software licences, physical machines or subscriptions. But the cost information does not become meaningful to management until it has been broken down by service. And this is something the finance system is not able to do. At least then management can see whether the cost of a service is roughly in line with the utility (or value) it provides.
"If management sees that the SLA targets are being met, but the cost of the service continues to go up, they want to know what is driving up the cost. The appropriate service management platform can allow them to start digging deeper. They may find, for example, that more people are using the service, or more incidents are being reported, or changes keep getting implemented to align the service with the needs of the business."
These are but a few examples. The point is that if SLAs are created, benchmarked and tracked on a collaborative ITSM platform, they can open many new doors to helpful information. They can reveal where the actual problems occurred, what lies behind costs, and even reveal if a service provides a compelling user experience (a topic we'll discuss in the next article).
"SLAs are important, but they can do more than they are today," Winkler Prins concludes. "A standard SLA report only tells you half of what you need, and you can unlock that extra information when the different parties use an appropriate service management platform. It also makes general management and oversight of SLAs much better. That's very important when digital transformation results in more complex service environments. You don't need to change SLAs, just how you define, capture and measure data around them. Then you open up a whole world of new insight that will help improve performance, accountability and costs."
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