Hines CIO Gerhard Karba uses service-level agreements to improve user satisfaction - and to show just what IT does with its staff and resources.

Service-level agreements are one of those polarizing issues in IT: You either love them or hate them. Anti-SLA CIOs say the agreements only serve to force IT departments into positions of subservience to the business and perpetuate the stereotype of IT departments as service providers as opposed to business partners. Pro-SLA CIOs, by contrast, view the documents as a means to transform technology-focused IT workers into customer-friendly, business-savvy employees - and as a mechanism for explaining exactly what IT does with its staff and budget, and the value that the business gets from those resources.

Gerhard Karba, the CIO of real estate giant Hines, is an advocate of SLAs. He says IT is better off pre-emptively setting service-level expectations with users rather than defensively scrambling to react to the business's demands for higher levels of service. So he and his staff spent most of 2003 proactively developing an internal SLA for Hines. Karba saw the SLA as a way to increase business users' satisfaction with IT, to get both the business and IT to agree on reasonable expectations for service, and as a performance management tool: The SLA established baselines for performance against which IT workers would be measured.

Since his internal SLA was implemented more than a year ago, Karba has seen other benefits he hadn't anticipated. For instance, he was able to prevent the IT steering committee from cutting the help desk by 30 percent during a budget review in December 2003; instead, the help desk sustained 15 percent in budget cuts. The SLA provided Karba with the visibility into IT performance, service and the cost of that service that he needed to convince the company to be gentle with the help desk. "With that information transparent, it was easy to explain the impact further cuts would have on the level of service the help desk could provide," says Karba.

Few companies develop such beneficial internal SLAs. The Robert Frances Group reports that many SLAs break down prematurely because they're based on unattainable guarantees that end up stretching IT staffs too thin. Another primary failing is to underestimate the cost of providing various levels of service. At Hines, the SLA was written by the people who were going to be held accountable for meeting the guarantees in it, leading to an important balance between what was reasonable for IT, and what was optimum for users.

Setting the Standard

Hines's internal SLA was initially focused on the help desk and later expanded to server support. Karba asked his help desk, customer support and training group to draft the SLA. Putting the effort in their hands helped curb the kind of resentment and pushback from the IT staff that frequently stymies such initiatives. Meanwhile, support staff knew going into the project that they couldn't set standards too low because business users had to sign off on the agreement. Plus, Karba was going to review what they drew up to ensure the commitments they made adequately stretched their abilities without overburdening them.

To figure out what guarantees they were going to make in the SLA, support staff analyzed the lifecycle of a trouble ticket, the kinds of calls that come into the help desk and typical response times. Poring over reports from their Magic Software help desk system, they identified the total number of tickets that are generated on any given day and categorized help desk calls by type of request (such as a hardware or software issue) and by level of urgency (that is, whether the call was a high, medium or low priority). High-priority calls have to do with users losing connectivity. Requests for new computers, provisioning IDs for new employees and deprovisioning terminated workers are examples of medium-priority issues. Decisions about priorities were also weighed against business goals. For example, any call having to do with the company's cash management system qualifies as a high priority since that system is an essential part of Hines's core business, real estate transactions that deal with money, banking and wire transfers.

Donna Mason, the director of customer relations, support and training in Hines's IT department, who worked on the creation of the internal SLA, says support staff discussed at length the guarantees they were going to make because they were uncomfortable with committing to a set amount of time to resolve calls, given the fact that even the most simple requests for help can turn into complex conundrums. After all, support staff wanted to be able to meet the commitments they were making. So they decided to give targets for response and escalation times, but not for resolution times.

The cost to provide service also had to be taken into consideration. For example, if they wanted to respond to all calls within four hours, they had to figure out how many people they'd need on the help desk and what that labour cost would be.

Karba notes that the law of diminishing returns also applies when setting service levels. For example, IT might have to spend a million dollars a year just to increase service by 10 minutes, says Karba, which is unjustifiable.

In addition, support staff had to factor into the service levels the content of the service-level contracts they had made with their IT vendors.