Published: 16 October 2000
Analyst(s): William Maurer, Richard T. Matlus
Management Summary The use of service-level agreements (SLAs) for the sole purpose of measuring results will not pass muster in today's chaotic and competitive business environment. The SLA process must go beyond mere measurement to include a methodology for the ongoing management of service levels, and for the continuous improvement of service activities, functions and processes. This Strategic Analysis Report provides a detailed, step-by-step guide to the two main phases of a successful SLA process: SLA development and SLA management. Key to the development phase is the definition of service-level requirements and metrics -- a process jointly undertaken by the service provider, and the service recipient's IT staff and end-user community. Together, this team identifies the key indicators that are focused on the service recipients' business needs. In this report, we provide guidance on the critical aspects of this process, including identifying business needs and drivers, defining service-level objectives (SLOs), setting target metrics with clearly defined data points, and establishing accountability for the achievement of SLOs. These elements serve as the foundation for effective SLA management, an iterative process that begins with the completion of the development phase and continues over the life of the service relationship. Phases in this process include measuring service activity results against defined SLOs, examining measured results for problem determination and root-cause analysis, taking appropriate corrective actions, and guiding service activities to preserve the gains achieved through these corrective actions. The benefits of the SLA development and management approach detailed in this report go beyond providing the foundation for a productive, successful outsourcing relationship. The process results will provide service recipients with the means to gain the added business benefits of improved competitiveness, measurable productivity...
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