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IT and Business Benefits of Implementing Service Level Management and Service Level Agreements

Service level agreements (SLAs) and service level management (SLM) are two critical components of a successful IT operation. Service Level Agreements help to establish clear expectations between the business and IT, while Service Level Management helps to ensure that those expectations are met. By focusing on setting and measuring service levels, businesses can trust that their IT operations are running smoothly and enabling desired outcomes.

Service Level Management

Why Service Level Management and Service Level Agreements? Benefits for Both IT and the Business

Service level agreements (SLAs) and Service Level Management (SLM) are two critical components of a successful IT operation. SLAs help to establish clear expectations between the business and IT, while SLM helps to ensure that those expectations are met. By focusing on setting and measuring service levels, businesses can trust that their IT operations are running smoothly and enabling desired outcomes.

A well-run IT department is an essential part of any business. Not only do they keep the day-to-day operations running smoothly, but they’re also responsible for ensuring that the company’s data is safe and secure. In order to run an efficient IT department, it’s important to have a clear understanding of the benefits that Service Level Agreements and Service Level Management can provide.

Some of the key benefits of SLAs and SLM include improved communication between IT and the business, predictable business performance, and quantification of IT investments. By setting service levels and holding IT accountable to meet them, businesses can trust that their IT operations are running smoothly. SLAs can also help identify issues before they become major problems, allowing for proactive mitigation.

In addition to the benefits that SLAs provide for businesses, they can also be helpful for IT employees. By establishing set boundaries for what is expected of them, SLAs can help to reduce the chance of disappointing the business. They also help businesses to track and measure progress against those expectations, which leads to increased customer satisfaction and loyalty.

If you’re looking to improve your IT department’s efficiency and communication between the business and IT, then you need to start using service level agreements. SLAs will help you to run your department more smoothly and provide benefits for both the IT department and the business. Below is a breakdown of some of those benefits for both IT and the business.

IT Benefits of Service Level Management and Service Level Agreements:

Cost control and containment

IT benefits from Service Level Management and Service Level Agreements in terms of cost control. With a clear sense of service level objectives, IT can spend wisely on well-defined requirements rather than rules of thumb or gut feeling. The resources expended by IT are commensurate with the benefits expected to be derived. In addition, SLAs provide a mechanism for monitoring actual performance against desired levels and for taking corrective action when service levels are not being met. As a result, IT can maintain a high level of service while controlling costs. When used effectively, SLM and SLAs can be powerful tools for managing the IT budget.

More efficient and effective operations

IT benefits of Service Level Management and Service Level Agreements include clearly defined commitments to businesses, which leads to more efficient operations. When Service Level Management is in place, the organization knows what they are responsible for and can plan their workflows around those parameters. This clarity reduces labor costs per IT system component because there is less need for firefighting and more opportunities for automating repeatable processes. Having an automated process in place also allows businesses to focus on other areas that may need attention. For example, if the customer service team has a clear understanding of the expectations set by the IT team, they can use that information to create efficiencies on their end as well. All in all, IT benefits of SLM and SLAs allow businesses to function more efficiently and effectively overall.

Service excellence reputation

When SLAs are in place and being met, it is a clear indication to customers that the organization is committed to quality service delivery. This, in turn, leads to improved customer satisfaction and loyalty, as well as increased business opportunities.

Employment security and outsourcing avoidance

Job security is often top of mind for employees, especially in the IT department. After all, there’s always the threat of outsourcing when businesses are looking to cut costs. But by having a service level management solution in place, and adhering to service level agreements, businesses can provide a higher level of service that is less likely to be outsourced. That’s because Serice Level Agreements establish clear expectations for performance, and Service Level Management solutions help businesses to track and measure progress against those expectations. As a result, businesses are able to more easily identify areas where they are exceeding or falling short of expectations. And when employees can show that they are regularly meeting or exceeding commitments, it becomes much less likely that the business will consider outsourcing the IT function. In other words, SLM and SLAs can help to provide greater job security for IT employees.

Set clear boundaries

If service expectations are not set in stone, they can easily be forgotten or pushed to the side amid other demands on the IT department. Service-level agreements and service level management help to prevent this by setting out clear boundaries for what is expected of IT and how it will be delivered. Having an SLA in place also helps to avoid conflict if expectations are not met. By having Service Level Agreements and Service Level Management in place, the IT department can better manage its resources and ensure that its customers are getting the best possible service.

Summary of IT Benefits

The IT benefits of service level management and service level agreements include improved service quality reputation, reduced labor costs per IT system component, job security for IT employees, and set boundaries for what is expected of IT. SLM and SLAs help to focus on setting and measuring clear objectives for IT services, which reduces the chance of disappointing the business. They also help businesses to track and measure progress against those expectations, which leads to increased customer satisfaction and loyalty.

Business Benefits of Service Level Management and Service Level Agreements

Collaborate and specify required service levels

Service Level Management and Service Level Agreements provide an opportunity for businesses, business units, business departments, and business stakeholders to provide input on what is needed from the service in order for them to meet their specific performance objectives. By collaborating with IT, businesses can ensure that they are getting the most out of their services and meeting their goals.

IT-business alignment

One of the key benefits of having service-level agreements in place is that it helps to align IT efforts with business objectives. This is done by prioritizing and focusing IT efforts, as well as ensuring that they are operating in line with what the business wants to achieve. By having SLAs in place, both IT and the business can have a clear understanding of what is expected from each other. This can help to avoid any misunderstandings and ensure that everyone is on the same page when it comes to what needs to be delivered. Having SLAs in place can also help to improve communication between IT and the business. This can be beneficial as it can help to ensure that everyone is working together towards the same goal.

Predictable business performance and outcomes

Service Level Management and Service Level Agreements play a crucial role in providing predictable business performance. By setting service levels and holding IT accountable to meet them, businesses can trust that their IT operations are running smoothly and enabling desired outcomes.

In addition, having SLAs in place can help identify issues before they become major problems, allowing for proactive mitigation and less impact on the business.

Quantify IT spending

SLA negotiations are important because they provide visibility and justification of IT costs necessary to achieve business performance. By quantifying IT investments, businesses can understand where their money is being spent and what benefits they are receiving in return. This allows for better decision-making when it comes to future IT spending.

Summary of Business Benefits

Key benefits of service-level agreements and service level management for the business include improved communication between IT and the business, predictable business performance, and quantification of IT investments. By setting service levels and holding IT accountable to meet them, businesses can trust that their IT operations are running smoothly and enabling desired outcomes. SLAs can also help identify issues before they become major problems, allowing for proactive mitigation and less impact on the business.

Implementing SLM/SLAs Made Easy with Ceeview

Now that you understand the benefits of Service Level Management and Service Level Agreements, it’s important to move on to the actual implementation. Implementing SLM/SLAs can be a daunting task. However, with the help of Ceeview, it can be much easier than you think.

Providing visibility into SLA compliance and trending can help organizations avoid or mitigate service disruptions. By understanding when an SLA is in danger of being breached and identifying the root cause of any breaches, organizations can take corrective action to ensure that service disruptions do not occur.

Ceeview: Differentiating Service Level Compliance Analytics and Reporting

Ceeview simplifies SLM/SLA implementation and provides differentiating analytical insights to ensure compliance. When monitoring service levels, it’s important to be able to answer questions about compliance. This means delivering on commitments made to achieve the objectives that are the reason for the agreements. Compliance is critical for ensuring that service levels are met and that business objectives are achieved.

Other market solutions stop at monitoring the current state and don’t analyze whether monitoring results are in compliance with agreements. Ceeview goes one step further by monitoring and reporting if SLAs are at risk of breach, so IT teams can take corrective action if necessary. This makes Ceeview the perfect solution for businesses looking to improve their SLM/SLA processes.

Figure below: Ceeview SLA Compliance Summary Dashboard

Figure below: Business Service and SLA Compliance Dashboard

Figure below: Overview of the Start-up/Summary page in Ceeview

Figure below: Ceeview Mobile App

FAQs

What is service level management?

Service level management (SLM) is the process of managing performance levels within a service organization to ensure that customer requirement are met. SLM also assists in ensuring continuous improvement of service delivery processes, leading to improved customer satisfaction.

What is the purpose of service-level management?

The purpose of service level management is to ensure customer requirements are met and service quality remains high.

What are the key concepts in service-level management?

The key concepts in service level management include performance measurement, target setting, incident response, and improvement process.

What is service level management in ITSM?

Service level management in ITSM refers to the process of managing performance levels within an organization’s service delivery systems. Service delivery systems can include a wide range of technologies and processes, which makes it difficult to manage everything simultaneously. ITSM solutions help organizations focus on key services and ensure they are delivered at the required level of quality.

What are the benefits of using a service-level management system?

The benefits of using a service-level management system include improved customer satisfaction, increased operational efficiency, and reduced costs.

How can SLM help you save money and improve your customer experience?

SLM can help you save money by ensuring that customer requirements are met and service quality remains high. This leads to reduced operational costs, such as staff time spent on non-value-added activities. It also helps improve customer experience by reducing complaints and improving overall service performance.

Conclusion

There are many benefits to implementing service-level agreements and service level management. By setting service levels and holding IT accountable to meet them, businesses can trust that their IT operations are running as expected. This helps improve communication between IT and the business, identify issues before they become major problems, and quantify IT investments. Ceeview simplifies SLM/SLA implementation and provides differentiating analytical insights to ensure compliance. When monitoring service levels, it’s important to be able to answer questions about compliance. This means delivering on commitments made to achieve the objectives that are the reason for the agreements. Compliance is critical for ensuring that service levels are met and that business objectives are achieved.

How to select proper metrics and KPIs for SLA monitoring

Service Level Agreements are an essential part of modern business contracts. In this blog, you will learn about SLA monitoring, which comes after a service provider and a customer sign an agreement. SLA monitoring is important because it makes sure that the terms in the agreed SLA are kept intact.  This way, businesses can collect data and analyze and monitor it to derive insights that would have otherwise been difficult to obtain.


sla monitoring
Ceeview SLA Dashboard

What is an SLA? 

A service-level agreement (SLA) is a document that defines the level of service expected by a customer from a supplier. SLAs specifies the metrics by which that particular service is measured and the penalties and remedies if the agreed-on service levels aren’t achieved. SLAs can be between companies and external suppliers, or even two departments within the same company. Only after both parties have signed an SLA can you begin SLA monitoring.

Benefits of having an SLA

  • Cost/savings – Providers can save resources.
  • Customer satisfaction – Customer issues are addressed quickly, leading to higher satisfaction levels.
  • Transparency – Clear guidelines enable the customer and service provider to be on the same page, making sure unmet obligations are accounted for.
  • Quick detection – By taking advantage of SLA monitoring, providers and customers can detect when an SLA breach has occurred or respond proactively if an SLA looks like it will breach.
  • Issue remediation – SLAs provide solutions when requirement levels have not been reached.

What is the difference between KPI and SLA?

Key Performance Indicators (KPIs) are used to measure how companies, businesses, or individuals perform against their strategic goals. KPIs help businesses know the specifics of how close or far the business is to achieving an objective. Thus, KPIs can highlight specific areas of the business that need improvement. 

An SLA can also be used to measure how the business is performing. However, it’s quite different from a KPI. Remember, an SLA is a clearly outlined agreement between a service provider and the end-user of that service. The main difference between a KPI and SLA is that an SLA defines the general agreement and service standards between service providers and their customers, while KPIs are used to measure and monitor performance levels.

How to design and verify service levels? 

To create or design a good SLA that will make SLA monitoring easy, you should make sure you include components from two critical areas: services and management.

Service elements include the specifics of the services provided. This means outlining service availability conditions, time windows for each service level, service/cost tradeoffs, and each party’s responsibility.

Management elements include the definitions of; measurement methods and standards, dispute resolution processes, and reporting processes. Other definitions falling in this category include indemnification clauses (protecting the customer from third party litigation due to service level breaches), and a way for updating the agreement.  Since service requirements and vendor capabilities change with time, ensure a mechanism is specified for updating the SLA.

To create the best SLA models that will make SLA monitoring easy, service providers need to understand their role and impact on an organization’s business outcomes. Using this approach, the culture changes towards a more strategic partnership between service providers, and the businesses that they serve.

To be effective, service providers should change how they measure service quality. They should find a way to align metrics to outcomes, e.g., revenue growth.

Verifying SLAs
Nowadays, most service providers have an online portal where statistics are available. SLA monitoring can be done by customers to check if SLAs are being met and to see if they are entitled to refunds as laid out in the SLA.

However, the best way to verify an SLA is for the customer and the outsourcing company to work together during the SLA contract negotiation to understand each other, the support method and process, as well as the management and reporting methods.

On the other hand, if customers are using critical services, they should invest in third-party tools to automatically capture SLA performance data. These will provide a precise measure of performance.

What kind of metrics and KPIs should be monitored? 

When doing SLA monitoring, the types of SLA metrics required will depend on the services being provided. First, examine your operation and determine what’s most critical.  When it comes to monitoring, the more complex the monitoring scheme, the less likely it is to be effective. Why? Because no one will have time to analyze all the data properly. Aim to keep the scheme as simple as possible to avoid confusion and additional costs on both the service provider and customer side. 

Therefore, opt for ease of collection of metric data. SLA monitoring using automated systems is better especially because the manual collection of metrics is costly and unreliable.

Once you have examined your operation, you can now monitor the following metrics (depending on service).

Service availability
This is the amount of time the service is available for use. Service availability can be measured by time slot; for instance, 99.5 percent availability required between specific business hours, e.g. 8am to 5pm, Monday – Friday or 24/7/365.

Business metrics
A business metric is a specified measure used to track the status of a specified business process. KPIs are the best approach to get business metrics if a vendor’s contribution can be calculated.

Technical metrics
Technical metrics are used to quantify and assess the critical technical attributes of delivered services. The main purpose of the technical metrics is to detect and fix issues before they impact the SLA. In SLA monitoring, they can be separated into two primary groups: high-level metrics, which deal with attributes relevant to end-users, and low-level metrics, which deal with attributes of the underlying technologies. Make sure that you’re specific when defining these terms.

What should I consider when selecting metrics for my SLA? 

When selecting metrics for SLA monitoring, the overall goal should be an equitable addition of best practices and requirements that will maintain service performance and avoid additional costs.

With that in mind, choose measurements that motivate the right behavior. Remember, any metric’s first goal is to encourage the appropriate behavior on behalf of both parties (the customer and the service provider). Each party must optimize its actions to meet the performance objectives defined by the metrics. After choosing your metric, test it by placing yourself in the shoes of the other party.

Ensure that metrics reflect factors within the service provider’s control. 
SLA metrics should have factors that are within the outsourcers’ control. This makes it easier to motivate the right behavior. Typical mistakes such as penalizing the service provider for delays caused by the customer’s lack of performance are avoided by making the SLA two-sided. This means measuring the customer’s performance on mutually dependent actions.

Choose measurements that are easily collected. 
If possible, the SLA metrics should be captured automatically, with minimal overhead. However, in cases where it’s not possible, choose the metric where easy collection is guaranteed; a manual collection of metrics takes plenty of time and effort, which may not yield results.

Set a proper baseline. 
The defined metrics must be reasonable and attainable. Over time, be prepared to revise and readjust the settings through a predefined process specified in the SLA. 

Less is more. 
Avoid selecting an excessive number of metrics. Why? An excessive number of metrics will produce a voluminous amount of data that will create more overhead costs and will take lots of time to analyze. On the other hand, avoid too few metrics since missing any one may mean the provider has breached the contract without it impacting the SLA.

Define with care. 
Make sure that the metrics are defined clearly to represent the intention of the service level. Clear definition helps avoid providers taking advantage of poorly defined SLA definitions. For instance, the Incident Response Time metric ensures that the provider addresses an incident within a minimum number of minutes. However, some providers may find a way around this by using automated replies to meet the SLA 100 percent of the time.

Also, make sure that the contract documents how the SLA monitoring will be performed. This includes detailing how the data will be captured and reported, who will review it and how it will be reviewed.

How often should we revise our SLAs?

As time goes by, businesses change, and so do their service requirements. SLAs should always be updated and revised periodically. To make sure revisions are not neglected, SLAs should include a clearly defined framework for modification during the contract term. Some of the main factors that should bring about a review include;

  • Changes in the customer’s business needs (e.g., more availability requirements if the customer establishes an e-commerce site).
  • Changes in the technical environment (e.g., Higher availability is made possible due to more reliable equipment).
  • Changes in the Workloads.
  • Improvements in metrics, as well as measurement tools and processes.

To sum it up

In this blog, you have learned what an SLA is, and the difference between an SLA and KPI. You have also learned how to design and verify an SLA. Above all, you have learned what kinds of metrics you should focus on during SLA monitoring. When choosing metrics for SLA monitoring always have both parties in mind. 

An SLA is a critical part of any supplier agreement. When laid out and defined correctly, it will pay dividends in the long-term. Server Level Agreements protect both parties and help them avoid disputes. It does this by using its clearly defined remedies that act as mediators between the two parties.

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