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SmartAdvice: Craft A Data-Center SLA So It Meets Business Needs

Outsourcing data-center work lets staff focus on higher-value activities, but pay attention to business metrics when drafting the agreement, The Advisory Council says. Also, RSS may be a useful tool depending on your's company's industry; and expect staff cultural challenges when switching from mainframe based apps to client/server or Web-based applications.

Editor's Note: Welcome to SmartAdvice, a weekly column by The Advisory Council (TAC), an advisory service firm. The feature answers three questions of core interest to you, ranging from leadership advice to enterprise strategies to how to deal with vendors. Submit questions directly to smartadvice@tacadvisory.com


Question A: What service-level agreement provisions should we expect to be able to get on data center outsourcing?

Our advice: Data centers come in all shapes and sizes, and so do SLAs. With that in mind, the keys to establishing an SLA for a data center outsourcing project will include clearly defining the objectives and requirements; holding the service provider accountable for its work while also motivating it to stick to the agreement and meet deadlines; and monitoring the assessment metrics to ensure their fairness.

The data center exists for the sake of the business, not for the sake of technology. Therefore, the SLA must be based on the needs and expectations of the business user.

Data Center Outsourcing
Data center outsourcing enables internal resources to focus on high-value activities, and the organization on its core competencies. The SLA should ensure that this outcome isn't compromised. The most commonly encountered types of data center outsourcing include:

  • Platform-hosted services such as co-location and Web-site management.
  • Subscription services such as E-mail hosting and wireless messaging.
  • Storage services such as backup, off-site storage, and recovery.
  • Performance reporting, change control, and similar services.

The typical benefits touted by data center outsourcing service providers include:

  • Cost effective, incremental scalability.
  • Around-the-clock access using redundant infrastructure.
  • On-demand service delivery and load balancing.

The primary drivers behind data center outsourcing are:

  • Reducing costs.
  • Eliminating a function that's not an enterprise core competence.
  • Bringing best practices into the data-center operation.
  • Freeing internal resources to work on more critical projects.

Service-Level Agreements
Data center outsourcing can positively affect a company's top line (e.g., through improved service on customer-facing applications) and bottom line, and could help it achieve industry best practices. The SLA should ensure that the best-practices objective is reinforced; therefore, a number of criteria should be included in data-center outsourcing SLAs, specifically:

  • What specific services are to be provided?
  • How the provider will deliver these services.
  • Who will measure service delivery, and how?
  • What happens if the provider fails to deliver?
  • How the SLA itself can be changed over time.


Related Links
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Here are the steps to be followed in creating an SLA:
  • Identify service levels that your infrastructure needs, so that the SLA is comprehensive.
  • Draft the SLA so that it clearly defines the service provider's responsibilities.
  • Negotiate the SLA with the service provider, paying particular attention to what services are being guaranteed, how they will be measured, the process for realizing agreed-upon remedies, and the amount of time the service provider has to correct problems.
  • Implement SLA measurement and enforcement tools and processes, to ensure that every SLA criterion can be measured and enforced as soon as the service is delivered.
  • Enforce SLA compliance, and identify and resolve problems that arise.

General SLA Guidelines
Some useful guidelines to keep in mind when creating SLAs include:

  • Ask only for what you need, and identify and protect the most important and critical organizational assets.
  • Define your criteria, and how you will continuously monitor them.
  • Cover best- and worst-case situations in the agreement, and make sure any penalties are fair.
  • Choose rewards with care, and keep them to a minimum.
  • Demand continuous improvement from the provider.
  • Get both staff and management buy-in.
  • Assign SLA enforcement responsibility.
  • Have an exit strategy should the need arise.

With proper planning, a company can create a data center outsourcing SLA that will meet its organizational needs. Be clear about best- and worst-case scenarios and draft the SLA in partnership with the provider, emphasizing the processes that ensure that terms are being met and that service continually improves.

-Sanjay Anand

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