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SERVICE LEVEL AGREEMENTS:
WINNING A COMPETITIVE EDGE FOR SUPPORT & SUPPLY SERVICES
By Andrew Hiles
Published by Rothstein Associates Inc.

"Service level agreements are an essential element in the provision of an appropriate and
timely service to business. Andrew Hiles' approach is easy to understand and of practical
use to both users and providers." - Graham F. Roulstone, Services Manager, Blue Circle
Industries, PLC, UK

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See DR595 or SL595 for SERVICE LEVEL AGREEMENTS for IT and TECHNOLOGY
environments.

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"An ever-increasing number of companies are becoming aware of the need to maximize
customer satisfaction, and the consequent need to quantify and measure service functions.
This book demonstrates how this can be achieved." - W. Adrian Smyth, Director and General
Manager, COTEC Computer Services, UK

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"The concept of service level agreements for all businesses is a topic whose time has come.
This book is a complete blueprint on the subject." - Paul F. Kirvan, Management Consultant,
Paul F. Kirvan Associates, USA.

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This book holds the key to creating enduring, satisfying and profitable relationships between
customer and supplier. It shows how both internal and external services and supply can be
aligned to meet business vision, mission, goals, critical success factors and key
performance indicators.

The techniques described will help you balance service cost against quality, leading to
competitive advantage and business success. They can be applied to any industry, to any
supply or support service. They have been used by leading companies internationally - and
they work!

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FROM THE PREFACE TO SERVICE LEVEL AGREEMENTS:
WINNING A COMPETITIVE EDGE FOR SUPPORT & SUPPLY SERVICES

“Frequently new technologies demand new, creative, methods of management. Occasionally
these new management models have the potential to enhance the effectiveness of business
areas never envisaged when the management method was originally devised: they are
transferable.

“One of the classic cases is the transfer of engineering management disciplines, for instance
quality assurance and quality control (and more recently total quality management - TQM).
Quality disciplines have permeated from the factory floor into virtually every area of corporate
operations and been universally embraced by world class organizations.

“Those first to seize such opportunities gain efficiency, effectiveness and, frequently,
competitive edge. But all too often, organizations simply react when they see more alert
competitors gaining advantage and the new techniques are implemented merely out of
defence. They are used as a band-aid when the cure is a transplant.

“The opportunity is rare - to identify and adopt such new concepts for competitive edge. The
dynamic world of information services, combining explosive growth with corporate
dependence, has had to create new methodologies to contain costs and manage service.
One of the key methods employed by the leaders in information services management is the
use of service level agreements.

“While a contract will govern the legal and commercial aspects of service provision it cannot
effectively govern the day-to-day delivery of the service quality - and contracts are irrelevant to
in-house service providers.

“Many corporate services are overheads - not profit earners, but profit dissipators. How can
their cost be controlled - or better, reduced - while preserving acceptable quality?

“A service level agreement is the tool which ensures delivery of consistent, appropriate and
timely service quality to meet the business need at the right price.

“Using case studies and examples, this book explains how service level agreements, born to
meet the challenges of a new industry, can be translated as a practical management tool in
any service environment, and provides a blueprint for their implementation.”

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EXCERPT FROM SERVICE LEVEL AGREEMENTS: WINNING A
COMPETITIVE EDGE FOR SUPPORT & SUPPLY SERVICES

“SLAs force the support service to orient itself to providing cost-effective service solutions to
business needs and to support the business plan. They impel management decisions on the
appropriate quality of service to be provided. They correct ivory tower astigmatism, directing
the vision away from technological or professional issues of the service provider and into a
business perspective.

“SLAs may sound like a universal panacea - but there are a number of things a SLA cannot
do. An SLA cannot compensate for inadequate definition of business objectives, nor can it
compensate for lack of standards. SLAs cannot substitute for poor customer management or
poor support service management. They do not obviate the need for other service
management disciplines and tools. They cannot be implemented without cost, nor be
implemented without resource. Most importantly, they cannot be effective without
commitment
from both customer and service provider.

“Both parties need to deliver their parts of the SLA - the quality of service can only be as
good as the accuracy of the customer's forecast usage and the customer's adherence to their
part of the Agreement.”

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TABLE OF CONTENTS

ACKNOWLEDGMENTS

1. AN OVERVIEW OF SERVICE LEVEL AGREEMENTS: WHAT THEY CAN DO
AND CANNOT DO
1.1 Introduction
1.2 Service Level Agreements : Definition
Figure 1: Pyramid Model of Service
1.3 Serving the Business
1.5 Outsourcing & Facilities Management
1.6 In-company vs Outsourcing SLAs: Crucial Differences
1.7 the Role of the SLA in Invitations to Tender, Proposals and Contracts
1.8 SLAs in Market Testing, Outsourcing and Supply / Support Contracts
1.9 Avoiding Hidden Costs - and Identifying Real Needs
1.10 Can SLAs Work in Strategic Partnerships?
1.11 Quality Standards ISO 9004 Part 2
1.12 Availability
1.13 Performance: Speed, Response and Accuracy
1.14 Security
1.15 Quality: Process Control
1.16 Service Products
1.17 Points of Delivery and Delivery Mechanisms
1.18 Service Culture
1.19 but Why SLAS?
Checklist #1: Service Orientation

2. THE MEASUREMENT OF THE SERVICE AVAILABILITY AND QUALITY: KEY
METRICS AND TECHNIQUES WHICH MAY BE USED
2.1 Introduction
2.2 Service Availability
Figure 3: Service Management Methodologies & Service Reporting
2.3 Change Management
2.4 Problem Management
2.5 Critical Component Analysis
2.6 Relationship with Security and Contingency Planning
2.7 Scope of Service
2.8 Service Hours
2.9 Real Time Services
2.10 Background Services
2.11 Administrative Services
2.12 Remote Services
2.13 Subcontracts
2.14 Help Desk and Customer Support
2.15 Security Services
2.16 Special Requirements
2.17 Standardization
2.18 Customer Self Help
2.19 Training
2.20 Customer Satisfaction Survey

3. HOW SERVICE LEVEL AGREEMENTS APPLY IN DEVELOPMENT OR
CREATIVE ENVIRONMENTS
3.1 Creative and Development Functions
Figure 4: Embedding Service Level Capability in Development
3.3 Feasibility Study
3.4 Analysis/specification
3.5 Design
3.6 Invitation to Tender/contract
3.7 Implementation
3.8 Post-implementation Review
3.9 Service Orientation

4. KEYS TO MEASURING AND MONITORING SERVICE; DESIGNING AND
IMPLEMENTING AN SLA
4.1 Measuring Performance and Availability
4.2 Balancing Detail with Practicality
4.3 What to Include in a SLA
4.4 Shell, Template, Model and Standard SLAs
4.5 SLAs and Their Key Role in the Balanced Scorecard
4.5 the Service Handbook
4.6 the One-page SLA
Figure 7: Example Service Definition
4.7 the One-page SLA
Figure 8: a One-page SLA Format
Figure 9: Service Level Management Components
4.8 Charging for Services
Figure 10: a Charging Methodology
4.9 Infinite Capacity and 100% Availability?
4.10 Realistic Limits to Service
4.11 Procurement
4.12 Organizational Issues
4.13 Pilot Implementation
4.14 Negotiating with the Customer
4.15 Reward and Punishment - Sticks and Carrots
4.16 Reporting Actual Performance Against SLA
Figure 15: Global Service Report - Schematic
Figure 16a: Sample SLA Report
Figure 16b: Background (Production Type)
Figure 17: Measuring Service Components
4.17 Service Review Meetings
4.18 the Customer Review Meeting
4.19 Service Motivation
4.20 Extending SLAs
Service Level Survey
Service Level Survey
Terms of Reference for Marketing and Sales Manager
Terms of Reference for Customer Account Managers

5. THE DOWNSIDE RISK; ALTERNATIVES TO SERVICE LEVEL AGREEMENTS;
THE SLA PAYOFF
5.1 SLAs: Reasons for Failure
5.2 Alternatives to SLAs
5.3 Performance Indicators
5.4 Availability and Response Targets
5.5 Benchmark Checks
5.7 the SLA Payoff : Success Stories
5.8 Where Next?
5.9 Conclusion

6. CASE STUDIES: SERVICE LEVEL AGREEMENTS
6.1 Introduction
6.2 Payroll and Benefits
6.3 Procurement (Service and Spares)
6.4 Logistics / Transport
6.5 Livestock Handling
6.7 Training
Detailed SLA Examples

7. CASE STUDY: SERVICE LEVEL AGREEMENT IN CONSTRUCTION
MANAGEMENT
7.1 Introduction
7.2 Background
7.3 Construction Management - Typical Approach
7.4 Construction Management - Service Oriented Approach
7.5 Service Levels in Construction Management
7.6 Identifying Metrics for Management Services

APPENDIX A: SERVICE LEVEL AGREEMENT CHECKLIST

APPENDIX B: SAMPLE SLA - ESCALATION PROCEDURE

APPENDIX C: STANDARD SLA FORMAT

BIBLIOGRAPHY

ABOUT THE AUTHOR

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ABOUT THE AUTHOR

Andrew Hiles is a Fellow of the Business Continuity Institute and a Member of the British
Computer Society. Andrew was founder Chairman of the influential European Information
Market (EURIM) group which supports the UK Parliament's All-Party EURIM Group in
handling European legislation. His first book on Service Level Management was published in
1991; his second book in 1993. He contributed to Croner's Guide to IT Purchasing. His
software package, SLA FRAMEWORK™, has been purchased by leading international
companies.

Starting his I.T. career with the Royal Air Force in programming and systems, Andrew moved
to London Transport in an operational role. Later, in their Central Productivity Unit and
subsequently as I.T. Projects Manager and as Manager of the Business Process
Re-engineering function, he led several major technical and organizational reviews involving
the reorganisation of key functions of London Transport. From there he moved to the Post
Office as their first Business Systems Consultant with responsibilities for major projects.
Subsequently as Computer Services Manager at Harwell Laboratory he provided
supercomputing, mainframe, midrange and client / server bureau services and operational
support of mainframe and midrange installations that Harwell facility managed. He also had
Customer Support and Quality Assurance responsibilities for the Datacenter.

Andrew is a Director of the Kingswell Partnership of I.T. Consultants - an international
consultancy specializing in delivering service and managing business risk. He has helped
hi-tech, financial, transport and government bodies to develop and enhance Customer
Support and Service Desk functions and has supported both customers and suppliers in
Service Level Agreements, Market Testing, Outsourcing and Facilities Management.

Andrew is a published writer and international speaker on service management. He has
presented at Cranfield, Henley, Ashridge and GEC Management Colleges and at numerous
conferences in Europe, USA, Southern Africa, the Middle East, Hong Kong, the Philippines
and New Zealand and Australia. He has broadcast on IT topics on radio and television.

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CHECK OUT THE COMPANION TEMPLATES ON CD-ROM: SERVICE LEVEL
AGREEMENTS: A FRAMEWORK ON CD-ROM FOR SERVICE BUSINESSES (2003
EDITION), order #DR603.

SPECIAL OFFER: Save $50.00!!!

For a limited time, special pricing is available on SERVICE LEVEL
AGREEMENTS: A FRAMEWORK ON CD-ROM FOR SERVICE BUSINESSES plus the
companion book, SERVICE LEVEL AGREEMENTS: WINNING A COMPETITIVE EDGE
FOR SUPPLY AND SUPPORT SERVICES. Order #DR603A.

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Published by Rothstein Associates Inc.
ISBN 0-9641648-6-8

2000, 296 pages. Order #DR450

IN STOCK FOR IMMEDIATE SHIPMENT!

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