What's wrong with SLA? (part 1)

By Jean-Pierre Gilles, December 30th 2014 


SLA: what is that for?


Unless you have worked on a different planet or really far away from IT matters, you have heard that sound, an read those letters, every week if not every day over the past years

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Service Level Agreement , as it stands… That acronym has become the alpha and omega of IT service management, as a general and shared hope that, yes, now, the dream will become true and IT organizations will deliver the services that the business needs! ….. Waoh!

Probably thousands of people have been trained and millions of dollars have been spent to ensure that it will happen. As a matter of fact, all levels of IT organizations are now speaking ITIL  and some - if not most - of their business partners have learnt about the meaning of those words.

Business partners know, now, that their service expectations will be taken into consideration, that Key Performance Indicators will be setup to help follow up and manage the delivery of services. Inside IT organizations and their own suppliers, Operational Level Agreements and Uderpinning Contracts are being implemented to help achieve that goal : delivering the services that the business needs. . . 


But what are we really talking about? 


How does it happen, even in organisations that have implemented ITIL years ago. The business is still complaining?

Ok, in some cases, the KPIs just show that the SLAs are not met: everybody seems to know what’s wrong… But in some other cases, though, SLAs are met and the service provider (be it internal or external) is proud to show the Score Cards and all those green labels that lay everywhere on the pictures. In those cases, sometimes (reality would say often) the IT customer just carry on complaining and, when asked , is eager to  share the reason why: IT can’t deliver what’s needed (again) or not fast enough, or not cheap enough, or any other good reason…. Quite obviously, IT service managers and their organization don’t understand that frustration and start thinking (again) that the customer, really, does not know what he wants… Back to the old world before SLAs… 


So, what's wrong with SLAs?


First of all, to adress the issue, let's start with some basic concepts and facts

►  The so called Service Level Agreement is the deliverable of a complex process that’s pretty well described in the books (especially ITIL) and can be synthetized  as below: 

►  The Business Partner express its  needs and service expectations

►  The Service Provider determines the service that can be provided to answer these needs and the associated cost/price (depending on the financial model), based on  the capabilities of its own resources or suppliers, that will be bound with service agreements as well (respectively  Operational Level Agreements and Underpinning Contracts)  .

►  The Business Partner and Service Provider negotiate the level of service that can be provided for an affordable cost. Once they agree, the SLA is set. 

So in essence, the SLA is a compromise: from the early beginning, the promise does not meet expectations, as the customer has to reduce his expectations to cope with budget/cost constraints. 

►  In most cases, Service Level Requests are set according to current and tangible business needs and/or past frustration, very rarely considering the future business needs and evolutions.

►   Setting up an IT organization that can provide a sustainable level of service takes time and efforts.

►   To maintain a sustainable level of service, solid change management is required… that tends to guarantee changes are proceeded and implemented with full control of impacts, costs, a.s.o, but adds a little bit of rigidity/constraint/delay in the way business related changes can be implemented.

►   Most SLAs include cost control aspects that ask for the cost of services to decrease.

►   Most SLAs include financial penalties when SLAs are not met.

►   Most SLAs are turned into a service contract that is bound for several years.


Then, as such, the SLA becomes the Reference for both the Business Partner and the Service Provider towards which the performance of the service is evaluated. 

►   Most SLAs are defined between the IT Service Provider and its direct Business Partner (internal or external), encapsulating other agreements such as OLAs and UCs between the IT Service Provider and its (respectively) internal and external partner

►   Regular reporting is provided  to and meetings are held  with the Business partner in order to exchange with him on service level provided, difficulties, needs and expectations.


In most cases delivering the agreed level of service is quite an issue and the initial attention and first efforts are really made to meet SLA targets. Once they are met, the attention and efforts remain focused on keeping the level of service and/or reducing the costs.



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