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Calling the Tune

Calling the Tune

They used to say that the difference between a used car salesman and a computer salesman was that the used car salesman knew when they were lying. I speak from experience: for eight years I was a computer salesman. Worse still, I then became a marketing manager.

Even allowing for hyperbole, IT doesn't have a good track record. It is almost as if the industry has deliberately set out to contradict the normal sales advice to under promise and over deliver. The perennial promise of IT to the business has been information at your fingertips. (In fact, about the only thing the IT industry has not promised in its history is that it will still love you in the morning.) These expectations have fuelled investment in IT throughout the parsimonious 1990s, with growth in most organisations averaging 80 per cent in relative terms according to IDC research.

Yet when I talk to IS executives their common frustration is handling the unfulfilled expectations of business. This is supported by the Forecast for Management survey which consistently reports meeting users, expectations as a primary challenge of CIOs. Moreover, many IS departments, with their increasing reliance on external service providers, find themselves piggy in the middle between user expectations and vendor promises.

Increasingly, IS executives are embracing the notion that he who pays the piper calls the tune. The move to service level agreements (SLAs) between the IS suppliers and the business users is growing. SLAs seek to try and articulate the priorities and measurement criteria for effective IS usage. Interestingly, IDC's research shows that the industry sector having the least difficulty meeting user expectations is also the sector which is most likely to deploy SLAs.

Unfortunately, SLAs can be difficult things to implement. In particular, with the business crying out for effective IS systems, arguing the need to develop a contract between IS and the business seems both unresponsive and unnecessarily bureaucratic. Furthermore, developing effective SLAs requires cooperation from both sides and resources. Many may advocate these could bring better returns invested elsewhere.

CIO (US) recently examined SLAs and had a number of recommendations for IS executives. In particular, it advised focusing on a few key areas to get runs on the board rather than trying to embrace all IS services. It stressed the need to keep SLAs simple, (only a couple of pages long), and to link IS salary schemes to SLA performance. It also emphasised that effective SLAs need constant vigilance and review if staff are expected to take them seriously.

Clearly, SLAs present an opportunity for IS and the business to determine what IS should be doing with the resources available. Done well, these negotiations help refine user expectations and highlight the direct correlation between levels of service and cost of that service.

However, the Australian management consultant John Smyrk points out SLAs are only one side of the coin. Smyrk argues that effective IS investments are dependent on both the supply of the IS service and its consumption by the end users. He sees that only business users can drive IS investments for effective business outcomes like greater stock turnovers or faster invoicing. As such, he advises that if business wants to measure IS performance through SLAs they in turn must be prepared to commit to separate agreements with IS that measure the effectiveness of their use of IS.

Peter Hind is the manager of User Programs, which includes InTEP, at IDC Australia

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