Advice for customers
The best and most practical advice when it comes to SLAs is to get educated. It is a tricky area and you will be best off representing your company if you know what you are talking about, so do the background research. It is a wise idea to have a staff member managing the agreement, so in-house expertise is essential. Simply typing in -service level agreements" into Google will result in a plethora of information, which is a good start. Otherwise, Janteknology's Miller says there are organisations out there that provide formal training in developing and managing service level agreements.
-These aren't massively long courses and you would be hard pressed to spend $2000â€"and it will be the best $2000 the company has ever spent," he says.
-Open your eyes, gets educated, understand the nature, understand the limits, understand what you are trying to achieve. You certainly need your own expertise, and don't rely on your service provider to be your tutor along the way," directs Miller.
Grant Anderson, national outsourcing manager at KAZ Computer Services, gives the following advice for IT managers: -Don't have metrics that are too difficult to measureâ€"keep them simple, be clear in the objectives, communicate the goals of the organisation clearly to the supplier, and work out mutually agreeable service levels so it is win/win."
A lot of customers have been around the outsourcing block before and have been burned. While it is making the industry more savvy, it is also making for more demanding customers. The concern here is that customers are asking for the impossible, and some providers give in to the pressure to make the sale and are guaranteeing service levels that shouldn't be guaranteed. Miller urges caution: -When customers push suppliers to guarantee things that they can't, it is doomed to fail."
So perhaps the most important advice of all is to be clear about what your company's needs, goals, and objectives are. If you know exactly what your company needs to perform well, then you won't fall in that trap. Don't start trying to write an SLA if you don't know how your IT system is currently performing, so take your time and do your research.
Lawyers and consultants
Of course if it is all too much you can always hire a third party, such as a management consultant, to help you along. Certainly for customers who are approaching a service level agreement for the first time, hiring both a consultant and a lawyer is probably a wise ideaâ€"but don't rely on them to do all of the work for you; you still need to know the basics.
A management consultant can be a good investment as they can offer advice on how to find a provider, advise how much the you should be paying for the service, and help you write the agreement.
The use of consultants is becoming more prevalent in the industry and are used by providers and customers alike. As an example, Pyke says Pacific Internet hired a consultant to put their SLA together from the supplier point of view, and most customers just have a lawyer run through it and add -a few bells and whistles".
Both Harrigan and Miller advise customers to get the lawyers involved after the agreement has been written.
-Lawyers tend to work on the I win/you lose things, its all about conceding points and not conceding points when this is about a partnerships. So I don't let them draft them, but get them involved in the end to make sure that you have covered everything," says Harrigan.
Looking ahead
Service level agreements are constantly evolving, they aren't to be written and then forgotton about. Instead you should make sure there are regular revisions. After all your business is likely to grow and change, so the agreement will need to change along with you.
META Group analyst Wissam Raffoul actually predicts that they way service is measured will change. By 2005 he believes business will start measuring service by workload, such as, by how many customer orders are processed per day. Of course, this will mean a change in infrastructure to include the ability to measure load and volume testing.
Gazing into the future, Pyke sees law enforcement could come into play to report against service performance. -We have an ombudsman and I can see them saying I want to have details of payments under the SLA to ensure you are actually paying out and that it's a reasonable percentage of services sold," he predicts.
Whatever is to come, you can be sure that service level agreements will become more widely used in future outsourcing arrangements. So by getting educated, and following a few guidelines, you hopefully will be able to avoid some common mistakes.
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