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Introduction to Implementation Guide for Service Level Agreements (SLAs)

A Service Level Agreement (SLA) is a document which identifies the agreed-upon services that will be provided to an internal or external client for a service in order to ensure that they meet the client's business need. The SLA identifies client expectations and defines the boundaries of the service, stating agreed-upon service level goals, operating practices, and reporting policies. Thus the SLA forms an explicit pact between the service provider and its client for the provision of the service. SLAs have traditionally been used in telecommunications service provision and IT service provision, but, subject to the service being suitable (as discussed later in "What Services are Suitable for SLAs?"), there is no barrier to implementing SLAs for a wide range of services.

The purpose of any Service Level Agreement is to describe and define the following:

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What Services are Suitable for SLAs?

The key criteria for deciding whether a service is suitable for creation of an SLA are the following: To clarify these criteria, we can examine two contrasting tasks for their suitability.
  1. Writing parking tickets is a service quite suitable for creation of a SLA. The service task is reasonably small, comprised of discrete and measurable units and the frequency of issue of tickets is quite high. The task of ticket writing is repeatable and does not impose any demand for original intellectual effort. The client (usually a city council) can normally be expected to define the service needs and these service needs are quite stable, since illegal parking is not a seasonably variable offence. Provided that the service provider is experienced in this or similar services, understands the service and can obtain s suitable supply of parking inspectors, this is a service which should not only be readily represented by a SLA but which is likely to be best managed by a SLA.
  2. In contrast, writing novels is a service completely unsuitable for management by SLAs; indeed the management of the task of writing novels is difficult be any means. The service is characterised by large discrete units of delivery which require significant individual original intellectual effort. The time to execute each "service" is prolonged, making opportunities for quality assurance limited. The task is, by its very nature, not repeatable as a novel needs to be "novel". The client is unlikely to be able to specify the service need in any meaningful way; witness the unseemly public contestation which tends to attach itself to every literary prize for novel-writing. The resourcing of the service demands unusual, specialised resources, i.e. fiction writers.
As can be seen by these examples, there are clear characteristics which indicate or contra-indicate a particular service for management by SLAs.

Assessing a Service's Suitability for SLA Management

In order to determine whether a particular service is suitable for management by SLA, we suggest using an assessment table to determine how the service, considered together with the capabilities of the service provider and the client, rates as a SLA client.
Service Assessment: Issue of Parking Tickets
Criterion Assessment Fit Assessment (H, M, L)
Service provider understands service Service provider demonstrates clear understanding of the service and has established metrics for its management High
Service provider experienced with this service (or similar) Has provided traffic infringement services for two years High
Service units small and discrete Patrol time measured in 8 hour shifts; each ticket issued 5 minutes work High
Service high frequency ~500 tickets issued per day High
Service repeatable Issuing tickets, independent of the circumstances is highly repeatable High
Service does not require original intellectual effort Conditions for issue of a ticket highly circumscribed; issue of ticket is a multiple choice fill-in exercise High
Client can define service needs Client council has long experience with ticket issue to draw on but may be unclear on service levels High
Service requirement stable Ticket issue records show less than 5% quarter-to-quarter variation Medium - service provider may be asked to help client in service level specification
Service provider can obtain suitable resources Service provider must recruit for roles and may encounter some difficulty in view of current high employment levels Low - this issue needs careful attention

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Where Next?

The complete series of Business Process Management e-books is as follows:

The series is available at the following website:

Modulus provides tools, applications and services to consultancies and website developers. For more information contact Peter Hill, peter.hill@modulus.com.au.

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