Sla recommendations from the users viewpoint october 2006
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SLA recommendations from the users’ viewpoint October 2006. Approach. Recommendations have been assembled based on the experience of several BELTUG members. These have been completed with comments from other companies, users and service providers, that were formulated during a BELTUG X-change.

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  • Recommendations have been assembled based on the experience of several BELTUG members. These have been completed with comments from other companies, users and service providers, that were formulated during a BELTUG X-change.

  • Structure

    • A few definitions

    • Organisational impact

    • Basic questions

    • Timing

    • Some templates, parts of existing SLAs, may be used as model

    • Liabilities

    • Penalties

    • Service degradation

    • Remarks from service providers

Mind that slides are commented on

corresponding notes pages


What not to expect
What not to expect?

  • BELTUG did not opt for sharing existing SLAs among members

  • Neither does it present ready-made articles that can be stuck just like that in an SLA agreement

  • Why:

    • ICT Managers are reluctant to share the details

    • Sometimes even a non-disclosure agreement (NDA) exists about the contract

    • The sum of 3 existing SLAs (contracts) may become unrealistic & conflicting

    • Purchasing power determines the relation customer-provider


A few definitions
A few definitions

  • Service Management refers to the sum of all the necessary processes to provide a service to end users

  • Service Level Management handles only a part of the ITIL Framework (see next slide)

  • Service Level Agreement refers to the contractual obligations of the provider towards the customer

The provider must deliver to the customer, according

to contractual SLAs, …. because the customer has

to deliver in the same way to his internal customers,

according to internal SLAs.


Organisational impact
Organisational impact

  • Practical example: Implementation of process-oriented Working Model (IPW tm) at KBC (Quint)

  • The importance of the diagram on the next slide

    • Processes are shown in their mutual relations

    • Thoroughness: incident management versus problem management = substantial difference!

    • ICT domain located between Business domain and Supplier domain

    • There is quite a difference between planning and operations

    • Without change mgt there can be no service level mgt

  • This exercise is appropriate for any company


Organisational impact1
Organisational impact

Source: Quint/KBC


Basic questions
Basic questions

  • It all boils down to: Keep it measurable.

  • Build out a willingness-openness to work out constructive internal solutions, together: business, ICT and purchase

  • What are the liabilities?

    • Are the contracts handled by Purchase or ICT or by a mixed team?

    • Are SLAs part of a formal negotiation track?

    • Who is in charge of negotiations?

    • Can SLAs be “reduced” during cost negotiations?

    • Can it be done without approval from ICT?

  • Create clear escalation levels: the watchdogs of your SLA



  • The organisation defines what is required + sets reasonable targets

  • Where is the SLA really mandatory?

  • Is timing very strict, becoming critical for the project?

    • Time required to build the contract with terms & conditions

  • Why not include your draft terms & conditions in your RFP ?

  • Be prepared to spend months of discussions! Different accesses, different connections…

    ….all require different SLA!


Even a well known availability requires stronger definitions

Templates: definitions

Even a well known “availability” requires stronger definitions

Let’s zoom in






Different possibilities for testing
Different possibilities for testing

  • To make testing more specific:

  • Do we handle here 1 component or an End-to-End service?

  • End-to-end can, furthermore, be seen in a range of:

  • 100% reactive,100% proactive

put probes and monitor

Register component faults

launch dummy transactions


Only penalty oriented
Only penalty-oriented?

Is the SLA strong & very specific towards penalties or …more oriented towards mutual long-lasting relationships(Set mutual expectancies right)?

  • This will probably be coupled with the length of the contract +

  • a strategic partnership or more commodity character of the deal

  • Win-Win in reality + fast escalation to avoid any diplomatic incident

    Risk-averse companies negotiate stronger SLAs with even stronger penalties

  • But a “SLA” is never replacing a risk-analysis

  • If business processes are well organised: perform a BIA (Business Impact Analysis) to start with, and do it per process

    Given the timeline can be very critical, some contracts contain stronger SLAs for the installation schedules than for the monthly charges


Alternatives for penalties
Alternatives for penalties

  • Penalty

    A non-delivery of service compared to the SLA, activates a compensation, to be paid by the service provider via an invoice from the customer.

  • Service Credit

    No invoice at all, the provider calculates “spontaneously” the agreed credits from the SLA and reduces the monthly charges accordingly.

  • Service Fee Reduction

    The provider agrees to reduce the monthly charges, as from the incident onwards in a systematic way.


The other party
The other party

  • Is the SLA for …

    • or for an OPERATOR (who can be up to 100% owner of the infrastructure of the concerned service)

    • an INTEGRATOR (who might be limited to offer “Helpdesk only” when all the rest is being THIRD PARTY Management under his responsibility, therefore closer to outsourcing and co-sourcing)


Service degradation
Service degradation

Pay attention to service degradation

  • Are such SLAs with utmost specifics or rather generic?

  • Are the metrics & statistics delivered by the provider?

  • Are the measuring conditions all clearly defined?

  • Are counter-measurements scheduled? Announced?

  • Are audits clearly agreed, who calls the shots, who pays, when?



Is the reportingof the SLA

+ the service management

+ the setup of the meetings

covered in the contract?

  • Who is the service manager, both at the Service Provider and customer? Who participates in these meetings? Are the functions clearly described?

  • Who provides the reports, …since that is a real workload

  • All the work delivered, in a timely manner?


Concerns of the providers
Concerns of the providers

  • SLAs should be part of the commercial negotiations, however many RFP/RFQ only allow for just a number to be filled in,

    “ X% “ as the absolute guaranteed value! Not even a dialogue,…

  • Do customers recognize the SLA as an added value? It will depend on the type of service itself. For some services quality is more important than price… and only then a strong SLA is mandatory

  • How will a customer react to an incident? For all providers the consistency & coherence in the reactions of the customers remain very important. Never postpone to make good agreements on incident reporting and incident resolution, certainly not until the first incident is a fact.