Internal SLAs benefit the entire company

An SLA (service-level agreement) is traditionally a contract between an organization and an external service provider, such as an ISP or ASP (application service provider), that mandates specific performance levels. But the usefulness of an SLA is not limited to outside services; SLAs can be used internally to define requirements for everything from help desk services to network performance and availability, application performance and availability, and internal processes.

Internal SLAs between IT and other departments provide numerous benefits to the entire organization. Managing expectations, boosting productivity, and increasing employee morale are all direct advantages. SLAs also provide indirect benefits. They can help the IT group prioritize work, and as an incentive to provide good service, they lead to better overall system performance. They can also help foster good relations between IT and other departments.

Creating an internal SLA is a simple five-step process. The first step is to set up meetings between IT and department managers and define the requirements and expectations of each party. For example, the IT department may want two weeks to process a new user request, whereas the managers who make these requests would love to have a one-day turnaround. Discussions may determine that one day is not realistic for the IT department and two weeks is not satisfactory for the department managers. In this scenario, a one-week response time may be acceptable to both parties.

A response time, or any other service measurement covered by the SLA, must be agreed on by all the parties involved, and the specific requirements and expectations should be documented. Without a clear, detailed record of what everyone expects, the SLA will not provide a means of managing expectations and identifying responsibilities.

Internal SLAs step-by-step

1. Define requirements and expectations. Clearly defined expectations are key to an effective SLA.

2. Define baseline requirements and means of measuring performance. You cannot enforce an SLA without establishing meaningful measurements and comparison points.

3. Establish a system of rewards and penalties for compliance and noncompliance. Without such a system, the service provider has no incentive to follow the SLA.

4. Implement tools to monitor SLA compliance. Unless you monitor performance, you have no way of knowing if the service provider is meeting its obligation.

5. Periodically review SLA contents for timeliness and accuracy. Technology changes quickly, and your SLA should reflect these changes in a timely manner.

Performance metrics

The second step is to identify the metrics and define the baseline requirements that will measure the effectiveness of the response time, performance, and availability covered by the SLA. For any service, the metric used to measure it should be one of the key, quantifiable indicators of service quality. The metric should also be realistic.

For example, if you want to measure response time, avoid insisting that all requests must be met with a response within 1 second. That's unrealistically strict. Instead, it would be better to state that 95 percent of requests must have no more than a 1-second response time and 5 percent may have a response time of between 2 seconds and 5 seconds.

The key to this step is finding quantifiable factors that are easily measured and analyzed. This can be very difficult, especially when dealing with network performance. You may not have any control over many variables and environmental factors that affect performance, availability, and ultimately the success of your SLA.

For example, an accident such as a severed Internet backbone, or simply Internet congestion, could affect network response time. The internal IT group has no control over such events, so these variables should be addressed in the SLA. If your method of measuring the service fails to take these factors into account, you may have difficulty enforcing the SLA.

Sticks and carrots

Once the requirements and metrics are defined, you need to come up with a system of rewards and penalties for compliance and noncompliance. An unenforceable SLA serves little purpose. It is well and good to say that all requests should have a 1-second response time, but if the group responsible for system performance does not incur any penalties for slower response times or reap any rewards for faster response times, then they have no real incentive to comply.

For traditional SLAs, the service provider typically reimburses a portion of service fees to the affected organization. The same could be done for internal departments if the organization has an internal payment process in place; otherwise, penalties could include a decrease in the group's budget. Rewards could include parties, cash bonuses, extra vacation days, and so on.

Rewards and penalties don't need to be outlandish. The goal is simply to provide incentives for the SLA to be followed and implemented. Internal SLAs provide a great opportunity to reward groups that meet or exceed the parameters and levels defined in the SLA. Besides potentially increasing corporate productivity and efficiency, they can also increase employee morale.

Monitoring the system

Once requirements, metrics, and incentives are defined and in place, monitoring capabilities need to be implemented to ensure SLA compliance. Lucent Technologies' NetworkCare VitalSuite monitors the networking and application performance from both the end-user and internal operations perspectives at all layers of the OSI model. InfoVista provides a scalable, Web-based monitoring tool that provides scheduled, on-demand, or real-time reports of service-level compliance for network equipment and servers, LANs, WANs, Web servers, and end-to-end application performance.

You do not necessarily need third-party products to monitor SLA compliance. You may be able to easily gather the information necessary for analysis in a simple Excel spreadsheet or database. For example, recording the initial request date and completion date for a new employee setup request can easily be analyzed for SLA compliance. Additionally, if you use an online request-tracking system, this process may be as simple as running a database query.

The goal is to find a way to effectively and efficiently monitor the metrics defined in step two. If you discover you are spending too much time evaluating and monitoring SLA compliance, you should re-examine the process. If the increased productivity or performance gained by the SLA is completely offset by additional costs incurred to monitor compliance, then the SLA isn't doing the company any good.

Finally, all SLAs should be reviewed at least annually. Because of the rapid pace of technology development, response times and other user expectations change almost monthly. SLAs must be periodically updated to reflect these changes. Without this step, SLAs will quickly become useless and out of date, often demanding service levels far below existing technological capabilities. Monitoring these agreements for compliance is a waste of time and resources.

Internal SLAs can be used as a tool to help improve customer and employee satisfaction. Providing a clearly defined expectation and measurable metric to evaluate compliance are key steps in establishing an effective agreement.

This story, "Internal SLAs benefit the entire company" was originally published by InfoWorld.

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