Thursday, December 6, 2007

Establishing, Enforcing, and Marketing SLAs

Another presentation that I attended at the Gartner conference was David Coyle's session on “Establishing, Enforcing and Marketing SLAs.”

He started the session by asking how many service level agreements (SLAs) were established at organizations represented by the audience. 74% of the participants reported that their organizations have at least one SLAs established, and 15% have over 20 SLAs. This result was fairly consistent with a survey that we conducted at OpenWorld. Over half of the respondents in our survey also indicated that they are using SLAs at their organizations.

The question, however, is how many of these are formal SLAs, and whether these organizations can guarantee the delivery of the SLAs. According to Gartner's model, an organization has to be at level 3 maturity or higher in order to be able to have high confidence in achieving SLAs. This is because many of the supportive service delivery and service support processes need to be in place first.

Even though an organization may not be ready to fully deliver the terms of an SLA, it doesn't mean it should not be done. SLAs are important because they help drive continuous improvements by providing targets to aim for, and they help IT communicate the values delivered. In fact, David Coyle argued that regular, formal service level review meetings should be used to highlight successes.

In terms of enforcement, the key is to make sure that there are proper rewards and penalties to drive behavior. The leading organizations even link IT staff bonuses to SLA attainment. This kind of practice is still rather rare, and it was confirmed by a participant poll that only a small percentage of organizations represented at the conference had this sort of policy. Still, linking performance to compensation makes a lot of sense as long as the system is implemented carefully.

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