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3 Goals for Setting Service Level Agreements


Several years ago I talked to a brand name bank about their SLA process with their customers. IT was already measuring performance, so they had an idea how well they were doing. They suggested that their current numbers should be their SLAs. Or maybe they would adjust the SLA a peg up or a peg down based on how much the customer complained. This IT department was setting SLAs based on what it was doing—not on what the enterprise actually needed. It really should be the other way around.


If this practice describes your IT department’s SLA process, I’d advise you to take a look at COBIT 5’s recommendations for setting service agreements. This whole area is about aligning IT-enabled services and service levels with enterprise needs and expectations. COBIT 5 suggests that SLAs should not be pushed on customers and instead, IT is responsible for ensuring that IT services and services levels meet current and future enterprise needs. It is our goal to make sure we measure for today and for the future. And in reality, SLAs should be determined as ITIL Version 3.0 suggests during the service design phase.


Goals for service agreements

To improve the management of service agreements, COBIT 5 suggests IT organizations measure themselves against three process improvement goals. Let’s explore each along with their recommended metrics to get a better idea of the impact of this process as a whole. 


1.                  The enterprise can utilize IT services as  defined in a catalog. Just like ITIL Version 3.0, COBIT 5 suggests that IT organizations need to become “service providers.” This means IT should create a catalog with promised performance and costs. One metric is used to measure success against this goal: number of business processes with undefined service agreements. In terms of this metric, this says that we need to do what a lot of organizations have failed to do. We need to determine a list of services, relate them to business processes, and set up service level agreements. I had a customer once who said their discussion of what a service was nearly broke out in fist fights with the customer. Clearly, this is not our goal of COBIT 5.


2.                  Service agreements reflect enterprise needs and the capabilities of IT. This here implies the fine art of balancing. Service agreements need to meet enterprise need, but they also must be realistic in terms of IT capabilities and expenditure. Gold plated SLAs should not be provided for services that are bronze level in importance. But at the same time, internal IT should not try to deliver what it cannot. For this goal, two metrics are recommended: percent of IT services covered by service agreements and percent of customers satisfied that service delivery meets agreed-on levels. I like the two metrics together because the first asks how much of the service portfolio have you reached with agreements. The second asks, even if you meet agreements do you meet perception? If perception does not meet reality, it begs either for greater awareness or possibly reconsidering current SLAs.


3.                  IT service performs as stipulated in service agreements. This goes after what could be called the juggernaut. Do I deliver to agreements that I make? Three metrics are recommended to manage this process goal: number and severity of service breaches, percent of services being monitored to service levels, and percent of service targets being met. These are core to service-agreement management. I want to see month-over-month improvement. I want breaches down, percent of service levels monitored up, and most importantly, targets tending to be met. The latter is, in my mind, the goal of service level management.

So where should you start?


As always, my suggestion is that you start where the most immediate value can be driven. But if it were up to just me, I would start with the percent of service targets being met. This is foundational in my opinion. What do you think? What would be first on your list? I would love to hear back from you.


Related links:

Blog post: Making COBIT 5 part of your IT strategy

Solution page:  IT Performance Management

Twitter: @MylesSuer

About the Author


Mr. Suer is a senior manager for IT Performance Management. Prior to this role, Mr. Suer headed IT Performance Management Analytics Product Management including IT Financial Management and Executive Scorecard.

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