Service-Level Agreements 101: An Executive Guide to Service-Level Agreements (SLAs)

Service-Level Agreements 101: An Executive Guide to Service-Level Agreements (SLAs)

SLAs are a critical component of any vendor contract. Beyond listing expectations of service type and quality, an SLA provides remedies when requirements aren't met.

What should I consider when selecting metrics for my SLA?

According to Hayes, it is important keep these guidelines in mind:

Choose measurements that motivate the right behaviour. The first goal of any metric is to motivate the appropriate behaviour on behalf of the client and the service provider. Each side of the relationship will attempt to optimise its actions to meet the performance objectives defined by the metrics. First, focus on the behaviour that you want to motivate. Then, test your metrics by putting yourself in the place of the other side. How would you optimise your performance? Does that optimisation support the originally desired results?

Ensure that metrics reflect factors within the service provider's control. To motivate the right behaviour, SLA metrics have to reflect factors within the outsourcer's control. A typical mistake is to penalise the service provider for delays caused by the client's lack of performance. For example, if the client provides change specifications for application code several weeks late, it is unfair and demotivating to hold the service provider to a prespecified delivery date. Making the SLA two-sided by measuring the client's performance on mutually dependent actions is a good way to focus on the intended results.

Choose measurements that are easily collected. Balance the power of a desired metric against its ease of collection. Ideally, the SLA metrics will be captured automatically, in the background, with minimal overhead, but this objective may not be possible for all desired metrics. When in doubt, compromise in favour of easy collection; no one is going to invest the effort to collect metrics manually.

Less is more. Despite the temptation to control as many factors as possible, avoid choosing an excessive number of metrics or metrics that produce a voluminous amount of data that no one will have time to analyse.

Set a proper baseline. Defining the right metrics is only half of the battle. To be useful, the metrics must be set to reasonable, attainable performance levels. Unless strong historical measurement data is available, be prepared to revisit and readjust the settings at a future date through a predefined process specified in the SLA.

What are the typical uptime provisions for an IT network services provider?

When it comes to hosted network services, most companies will need at least 99 percent uptime; many providers will offer 99.9 percent uptime or higher. It is important to understand exactly what this means, as 99.9 percent uptime equates to 43.2 minutes of unplanned downtime per month. For many enterprises, that level of availability is not acceptable. It is a common practice for a provider to offer nearly 100 percent uptime for certain business-critical applications, but you must be prepared to pay for this guarantee. Many providers offer different levels of uptime guarantees, priced accordingly.

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