Improve IT-Business Alignment Through an Internal SLA Understand business requirements, clarify current capabilities, and enable strategies to close service level gaps. Info-Tech's products and services combine actionable insight and relevant advice with ready-to-use tools and templates that cover the full spectrum of IT concerns.© 1997 - 2015 Info-Tech Research Group

Internal SLA Planning and Execution Workflow Follow Info-Tech’s Internal SLA Planning and Execution Workflow to create effective SLAs 1. Scope the pilot project Perform discovery and brainstorm project goals Analyze the ease of implementation and impact of potential projects Complete the project charter and get sign-off 2. Determine current service levels Map your current SOPs Define your metrics and develop a tracking process Determine current service levels (based on estimates or historical metrics) 3. Set target service levels and create the SLA Develop target metrics with the business and determine projects to meet any gaps Create the draft internal SLA Establish a standard for continuous improvement Internal SLA Planning and Execution Workflow Phase 1: Scope the pilot project Maturity scorecard Project charter Phase 2: Determine current service levels Mapping operational processes Service-level metrics tracking wireframe Phase 3: Create the business-facing SLA Project Roadmap Availability/Reliability SLA Service Desk SLA Service Catalog SLA Call your account manager to schedule a Guided Implementation

Introduction IT managers who are responsible for meeting service-level expectations. Organizations seeking to formalize, optimize, or validate an existing internal service-level agreement (SLA). Organizations who are currently struggling with business user experience and satisfaction. Use the SLA process to help the business understand current capabilities, clarify actual business requirements, and drive continuous improvement to close service-level gaps. Ensure your SLAs stay in sync with current requirements. Strengthen IT-business alignment and business satisfaction with IT. IT managers in gaining a comprehensive understanding of the SLA process and establishing a framework for negotiating external SLAs. Other business managers in transferring the SLA framework outside of IT and into other business areas. Understand the role of internal SLAs in improving the ability to establish and manage external vendor relationships. Establish a consistent methodology across the organization for determining appropriate service-level goals.

Executive summary The business is rarely satisfied with current service levels. Even if there is a SLA in place, it often doesn’t address IT-business friction because the SLA process failed to clearly communicate current capabilities and identify appropriate targets. Limited IT budgets make it even more critical to ensure IT investments align with service-level requirements. The key benefits come from the SLA process rather than the artifact – the clarity gained by both the business and IT regarding current capabilities, business needs, and steps that can be taken to close service-level gaps. Clarity and transparency is critical to a successful SLA. Identify the current lagging service levels, and establish a roadmap of how you plan on improving them. Often the business just needs to know the possible and the impossible. Dissatisfaction with IT is often based on perception. Without tracking current service levels, IT cannot effectively address perception issues. The gap between current and desired service levels is not quantified, making it difficult to plan IT investments appropriately. Business leaders have service-level expectations regardless of whether or not there is a formal agreement. The SLA process enables IT to manage those expectations. Create an effective internal SLA by following a structured process to report current service levels and set realistic expectations with the business. This includes: Defining the current achievable service level by establishing a metrics tracking and monitoring process. Determining appropriate (not ideal) business needs. Create an SLA that clarifies expectations to reduce IT-business friction.

Create a strong business case for an internal SLA An internal SLA is an agreement between IT and the business. The SLA outlines current service levels, sets target service levels, and assigns responsibilities to the service provider and the customer. Promising service-level targets without incorporating input from all parties will almost always lead to sub-optimal outcomes. Use the SLA process to align IT customer expectations and IT capacity. This ServiceXRG survey highlights the connection between SLAs and customer satisfaction Improved business alignment. Use the SLA process to gather information that can align IT spend with business needs. Set standards for continuous improvement. Outline targets and timelines to improve service provision that have business sign-off. Uncover process gaps and risks. Use process mapping to assess current capabilities and highlight potential adjustments. Predictable service provision. Data outlining current and target service levels is published for both clients and providers. Improved external SLA outcomes. The improved understanding of business needs can be used to set external SLAs. Improved communication. Building the SLA requires close collaboration between IT and clients, enabling the flow of ideas. Improved conflict resolution. Use the consultation process to bridge silos and generate mutual understanding. Continue the conversation. Make the SLA a living document and a channel for information transfer between the business and IT. Multiple benefits and goals: Sources: ServiceXRG; Sweeny, Tom. "The Benefits of Offering SLAs." 

Understand the reasons why many internal SLAs fail to achieve the desired objectives Internal SLAs are often developed in the same fashion as an external SLA, where the SLA is treated like a legal document. If one party fails to meet expectations then punitive actions will follow. Carrot and stick approach Traditionally creating an SLA has been a lengthy resource-intensive project. SLAs are scoped to be able to track all IT services and be written in oppressively fine detail. Complexity The business often demands an internal SLA from IT, yet the business does not involve itself during the SLA creation process. One-sided representation The overbearing nature of a legal contract motivates IT to commit to a lower standard of service to minimize the risk of failing to meet service levels and avoid negative consequences. Wrong incentives Due to poor project scoping, the SLA requires too much effort to complete properly. This leads to inaccuracies or shortcuts, or the project simply stalls and is not completed. Project inertia Since the business was not involved, the SLA is often written in “IT speak.” This creates a barrier in communication, and the SLA is no longer an effective tool for achieving IT-business alignment. Poor data presentation SLAs that are poorly implemented will drain away hours of effort and deliver little to no value. Minimize wasted resources by carefully crafting and managing your SLA process with Info-Tech’s methodology.

Case Study: Benefits of a SLA will only be realized through a commitment to collaboration between the business and IT A large telecommunication provider is provisioning network operations and management services. As part of the service, a SLA is created. Situation This provider documented a comprehensive list of both network and service performance metrics, which was agreed to by both parties. The SLA values for the network and service performance were all defined based on current capabilities and supported through data driven from past performance and ticketing system. Action Excerpt: Adapted From: Hartley, Karen L. "Defining Effective Service Level Agreements for Network Operation and Maintenance."

Case Study: Benefits of a SLA will only be realized through a commitment to collaboration between the business and IT By establishing clear SLA definitions and metrics, along with using current state data, communication between the customer and service provider were dramatically improved. The improved communications facilitated the focus on long-term service improvements instead of reactive problem solving. Since the metrics and methods of measurement were established by both parties, it ensured that it was the most cost-effective approach and buy-in was quickly established. The SLA was broad enough in scope to capture a wide variety of services, yet detailed enough so that root-cause analysis can be conducted to evaluate the service performance and motivate the appropriate behavior. Result Adapted from: Hartley, Karen L. "Defining Effective Service Level Agreements for Network Operation and Maintenance." The process of creating the SLA is just as important as the final document. Effectively manage the process to create a pilot project that aligns IT with the business and acts as a showpiece to generate buy-in for extending the SLA process to other areas. Info-Tech Insight

Use Info-Tech’s research to get to the starting line Creating an internal SLA is a key step in several crucial business-facing IT projects. Use the following Info-Tech research prior to or in tandem with this blueprint. 1 Create a Right-Sized Disaster Recovery Plan: Creating an effective right-sized DRP starts with discovering current capabilities, defining business requirements, and closing the gap in service continuity capability. 2 Standardize the Service Desk: Increase service desk effectiveness, improve services, and move from a reactive to a proactive culture by improving your service desk processes. 3 Design & Build a User-Facing Service Catalog: Create a made-to-order menu of IT services for your users to easily understand what IT offers. 4 Establish a Service Metrics Program That Meets Business Needs: Produce insightful service metrics that lead to meaningful action defining objectives, creating a plan, and optimizing collection and reporting processes.

Guided Implementation Info-Tech offers various levels of support to best suit your needs Guided Implementation “Our team knows that we need to fix a process, but we need assistance to determine where to focus. Some check-ins along the way would help keep us on track.” DIY Toolkit “Our team has already made this critical project a priority, and we have the time and capability, but some guidance along the way would be helpful.” Workshop “We need to hit the ground running and get this project kicked off immediately. Our team has the ability to take this over once we get a framework and strategy in place.” Consulting “Our team does not have the time or the knowledge to take this project on. We need assistance through the entirety of this project.” A consistent methodology used throughout all four options

Follow Info-Tech’s methodology to develop your internal SLA 1. Scope the pilot project 2. Determine current service levels 3. Set target service levels and create the SLA Best-Practice Toolkit 1.1 Identify the benefits of an SLA, perform discovery, and brainstorm project goals. 1.2 Analyze the ease of implementation and impact of potential projects. 1.3 Complete the project charter and obtain sign-off. 2.1 Document current IT operational procedures. 2.2 Identify the metrics to track. 3.1 Validate your current state with IT staff and identify the target state with the business. 3.2 Develop a project roadmap to bridge service-level gaps. 3.3 Create the SLA document and establish a review process. Guided Implementations Identify the goals of an SLA for your organization. SLA category overview and identification of the relevant SLA pilot project(s). Create the project charter by establishing roles and responsibilities as well as project scope. Review and document the current operational dependencies and maintenance procedures for applications/systems or services. Document each SLA metric and establish the parameters of a cost- effective system for metrics tracking and reporting. Analyze findings from IT and business discussions. Create a roadmap to improve current service levels. Create a business-facing SLA that reflects the needs of the business. Onsite Workshop Module 1: Determine the scope of your pilot SLA implementation. Module 2: Determine the currently achievable service levels. Module 3: Identify target service levels and create the SLA. Phase 1 Outcome: Outline the SLA project scope and determine the relevant pilot project. Phase 2 Outcome: Metrics that indicate the current service-level strengths and weaknesses. Phase 3 Outcome: An internal SLA that will effectively manage the IT-business relationship.

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