OPINION: If service level agreements are entered into to smooth a relationship, why do they always seem to be the source of the problem?

Service level agreements are a critical tool for IT managers, guaranteeing performance for everything from network performance to the delivery of business benefits. And they are the bane of service providers, who are not used to delivering the benefits they promise. Right?

Wrong.

Recently, there's been increasing attention to service level agreements (SLAs). More rigorous due diligence on IT projects requires the (often significant) investment made on IT infrastructure to deliver measurable productivity increases or cost savings. Ironically, perhaps, this is a process that benefits both parties when approached correctly.

In delivering network management services and providing managed service offerings, an SLA provides a framework by which the customer can evaluate the effectiveness of the "deliverable". Conversely, it enables the service provider (in this case, us!) to operate ongoing IT services in a controlled way, providing a common basis to manage and assess any services provided.

So then why are SLAs seen as a threat to service providers? And why do IT managers often feel that an SLA will solve all their problems, only to discover months later that it has become the primary bone of contention in their relationship with the service provider? Often the parties don't put enough thought into what results they're seeking, leading to SLAs that are impractical, impossible to measure, or simply don't relate to the problem/initiative that is being addressed.

Sara Cullen, a senior manager at Deloitte Touche Consulting (who has been a consultant to numerous public and private sector clients) puts it simply: "Though increasingly accepted as part of any outsourcing deal, IT folk on both sides of the fence are still unsure of what makes a good SLA."

Here are a few common failings of SLAs:

• They don't set out responsibilities and expectations.
• They are lengthy, complex, or unmeasurable.
• They focus on penalties, not rewards.
• They are not in line with business priorities/objectives.
• They raise expectations that all your problems will go away.

Many IT managers spend months devising complex SLAs, which look impressive on paper, but comprehensively fail to translate to a useful ongoing measure. The complexity means that by the time the performance can be measured, the value (and ability to correct any shortcomings) is compromised (in fact, the Gartner Group consider measurement periods greater than one month unacceptable).

Even the best SLA risks obsolescence by changes that can't be foreseen by either party. The key to addressing this issue is continuous communication and review. An effective SLA enhances the provider/customer relationship by providing transparency of service delivery and results. If it is no longer fulfiling this task, it needs to be reviewed (something far more achievable if it is based on simple and measurable criteria) and adjusted to meet the new business/IT conditions.

As a Gartner report found when looking at a seven-year outsourcing deal: "The problem was that long-term service parameters could only be outlined in very general terms; in reality, they would be constantly changing."

While every SLA is different, there are a few basic principles of a successful service level agreement that we believe is critical to achieving a mutually beneficial outcome:

• Clearly defined end-to-end ownership.
• Full, frequent, and frank communication.
• Regular, flexible, informative, and accurate service reporting showing performance and trends.
• Central control of all information.
• Constant review and feedback of business changes and needs.
• Simple and measurable structure.
• Clear communication to senior management so service expectations can be managed and agreed.
• Understanding and agreement from all parties that the service levels may require phased introduction to allow for an initial bedding down period.

The bottom line: SLAs play a vital role in a long-term and constructive relationship with service providers. It pays to get it right at the outset, using it as a valuable tool that helps both the customer and IT provider achieve an effective solution. n

Oliver Descoeudres is marketing manager at network IP/Internet network infrastructure builder and solutions provider NetStar Australia.

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