InformationWeek

Nevertheless, use is widespread:About two-thirds of IT organizations surveyed say they are doing some form of service-level management. However, closer examination reveals that when reporting on service levels, it is common to include some highly technical metrics--such as dropped packets--rather than something more meaningful to the user community. Once again, this leads to misunderstanding and misinformation surrounding this topic.

Myth No. 1: SLM equals SLA.
Perhaps the greatest mistake that managers make in thinking about service-level management is to assume that it's the same as service-level agreements. It's not. The line of reasoning is that SLA and SLM are interchangeable terms, and all that's required to put an SLM program in place, and subsequently realize all the associated benefits, is to slap together a few SLAs. Nothing could be further from the truth.

SLM, above all else, is a philosophy or perspective--a way of thinking about services that needs to be viewed in the context of users or service consumers, their requirements, their priorities, etc. It's about managing and delivering services that consistently meet those requirements. Within the domain of IT, services can best be thought of as access to the functionality of a specific application, such as billing. From a user perspective, it's the end-to-end perspective regarding the service that's most relevant. The delivery of those services is enabled by processes, personnel, and technology. SLM can be successful without SLAs. On the other hand, SLAs in the absence of SLM are meaningless.

Myth No. 2: SLAs will make users happy.
SLAs are not a panacea. They don't bring about world peace or even IT peace, magically turning unhappy users into happy ones. An SLA is a way to set expectation levels and communicate about the services that are being delivered. The setting of users' expectation levels can go a long way toward making them happy. Similarly, regular, honest reports comparing actual levels of service with those expected can also help raise the level of satisfaction among users.

Myth No. 3: SLAs will result in higher service levels.
Many users fall victim to this fallacy. By itself, an SLA can't directly produce any change in the level of service delivered. However, service-level improvements sometimes coincide with the establishment of SLAs for two reasons: First, when an SLA is signed, the service provider will often start to pay closer attention to those aspects of the service that will be measured and reported on for the SLA. Also, as a result of the communications that take place during the course of negotiating an SLA, the service provider may better understand which aspects of the service are most important to the user. Second, along with the establishment of an SLA, the service provider should implement a program of service-level management. It's the service-level management program that will actually result in higher levels of service.

Myth No. 4: Penalty clauses in an SLA will guarantee service levels.
Penalty clauses can serve two purposes. The first is to represent a potential source of pain that acts as an incentive for the service provider to try harder to meet the service-level guarantees. The other function that a penalty clause can perform is to compensate the user for the consequences--lost business, higher costs, etc.--of the lower levels of service. In truth, it's very difficult to negotiate penalty clauses that will really meet either of these objectives, and service providers are resistant to putting such significant guarantees in the SLAs.

There is another issue to remember regarding penalty clauses, too: Not every service provider is willing to honor them cheerfully, so actually collecting what is owed to you may require legal action.

Myth No.5: SLAs are not necessary when outsourcing IT functions.
In our study, we found that a surprisingly high number (59%) of the 100 companies interviewed don't have SLAs or any service-level guarantees from their outsourcing partners. At best, this level of trust can be characterized as naive. From a harsher perspective, this could be considered gross negligence on the part of the managers who negotiated the contract and those who approved it. In your personal life, would you sign a contract that obligated you to pay for a new car but didn't obligate the dealer to deliver that car to you? Yet that is the equivalent of what many IT managers are doing in their dealings with outsourcers.

There are many more myths about service-level management. The bottom line is that done properly, SLM offers tremendous benefits to service providers and to users. If you're interested in learning more about SLM, the Web site www.nextslm.org offers a variety of resources, including templates for SLAs, a list of vendors offering products to assist with service-level management, and a forum for the discussion of SLM issues with your peers.