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THE COMPLETE GUIDE TO IT SERVICE LEVEL AGREEMENTS:
ALIGNING IT SERVICE TO BUSINESS NEEDS
(NEW - 2002 THIRD EDITION!)
by Andrew Hiles
Published by Rothstein Associates Inc.

===============================

***** SPECIAL COMBINATION OFFER! *****

Save $55.00!!!

For a limited time, special pricing is available on SERVICE LEVEL AGREEMENTS: A
FRAMEWORK ON CD-ROM FOR IT AND TECHNOLOGY and the companion book, THE
COMPLETE GUIDE TO IT SERVICE LEVEL AGREEMENTS: ALIGNING IT SERVICE TO
BUSINESS NEEDS (3rd Edition)!

Save $55.00!!!

===============================

See DR450 or SL450 for SERVICE LEVEL AGREEMENTS for Service (non-technology)
environments.

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Most suppliers lose around 16% of their customers each year. The reason? Poor service —
whether perceived or real.

Any technology-based support service, whether in-house, contracted or outsourced, stands
to
be accused of being insensitive to the requirements of its customers (or users). Equally,
customers of a support service may have unrealistic expectations of what can be reasonably
provided.

Service Level Agreements (SLAs) can overcome these gulfs. A Service Level Agreement
can create harmony between parties and can prevent disputes between customers and
suppliers. It can justify investment and identify the "right" quality of service. It can mean the
difference between business success and failure.

SLAs are potentially a strategic tool to align all support services (particularly IT) directly to
business mission achievement. In the past, few organizations used them in this way. Armed
with this book and the companion SLA FRAMEWORK, more and more businesses are now
succeeding.

Where are SLAs going? Increasingly business-focused. Increasingly measured in real-time.
Simple documents that cover complex service infrastructures. Providing a competitive edge.
Embracing penalties.

The brave, who commit to tight SLAs and perform against them will win the commercial
spoils. This book provides the knowledge and tools based on fifteen years of intensive
development to ensure your enterprise is among the winners.

===============================

Covering all aspects of Information Technology Service Level Agreements (SLA's), this
essential manual is a step-by-step guide to designing, negotiating and implementing SLA's
into your organization. It reviews the disadvantages and advantages, gives clear guidance on
what types are appropriate, how to set up SLA's and to control them.

An invaluable aid to IT managers, data center managers, computer services, systems and
operations managers.

This unique, comprehensive guide is a major update of Andrew Hiles’ landmark 1991 guide
to Service Level Agreements and 2000 Second Edition.

Be sure to check out SLA FRAMEWORK (#DR399), a CD-based Service Level Agreement
package, also available through THE ROTHSTEIN CATALOG ON DISASTER RECOVERY.

==================================

EXCERPT FROM THE FOREWORD TO THE THIRD EDITION

“Most suppliers lose around 16% of their customers each year. The reason? Poor service.
Typically if you provide good service, your customer may tell five people. "Customer
promiscuity" is the norm: your customers and prospects are one click away from your
competitors. Discontented customers typically tell over ten people how bad you are. In the
days of bulletin boards, a discontented customer can place messages that can impact -
maybe even destroy - your business. In the often dangerous and unpredictable e-world,
Service Level Agreements are imperative to protect both parties.

“Any support service, whether in-house, contracted or outsourced, stands to be accused of
being insensitive to the requirements of its customers (or users). Equally, customers of a
support service may have unrealistic expectations of what can be reasonably provided by it.
Service Level Agreements can overcome these gulfs.

“All too often service level reports are misleading: bad statistics, measured in ways and at
points that do not truly reflect the service experience of the customer. This book exposes
pitfalls, problems and challenges in e-business Service Level Agreements and lays the
foundation for harmonious and effective customer-supplier relationships to enable actual
service delivery to become aligned to customer expectations.

“What, then, is a Service Level Agreement? A Service Level Agreement is simply an
agreement between the support service and the user quantifying the minimum acceptable
service to the user. SLAs are particularly valuable in real time activities of e-commerce where
speed-to-market is crucial; where there is no time for mistakes; and where millions of dollars
can be lost in minutes.

“A Service Level Agreement can create harmony between the parties, and avoid disputes
between customer and supplier. It can justify investment and identify the "right" quality of
service. It can mean the difference between business success and failure.”

- Dr Yvonne Gunn, Kingswell International

==================================

EXCERPT FROM THE PREFACE TO THE THIRD EDITION

“Some 15 years ago, the UK IBM Guide Operations Managers group (of which I was Chair)
held a meeting in which we discussed the concept of SLAs. I had read about the pioneering
work in this area by Bill Miller of American Airlines and developed by the Capacity
Management Group. Seizing on the concept as good management practice, I first
implemented them in the company for which I was then working. It really was leading edge
stuff in those days and there was little guidance, so in 1988 I began to present training
workshops on the topic. These aroused considerable interest and I was persuaded to write
the first book on the subject, published by Elsevier. Believing this concept was equally
applicable to any support or supply service, the second book, suggesting this transition,
quickly followed. We began to receive inquiries about SLAs from a wide range of public and
private sector enterprises, covering a broad spread of business and support functions. Since
then we have presented on SLAs at conferences and workshops around the world and
written literally hundreds of articles on the subject.

“My vision in SLAs is simple: SLAs are potentially a strategic tool to align all support
services
(especially IT) directly to business mission achievement. Sadly, few organizations use them
in this way.

“The early SLAs were IT-centric, written in IT technical terms, and predominantly provided the
IT user with service levels that had more to do with internal IT performance measurements
than with business-oriented service achievement. Frequently metrics were inappropriate,
measurements imprecise and monitoring weak. The SLA reports simply did not reflect the
experience of the customer when using the service. Now, the more mature organization
writes business-centric SLAs and has sophisticated performance measurement tools that
accurately reflect the customer's or service user's actual experience. Unfortunately, we are
now seeing the legal profession moving into the field of drafting SLAs, changing the concept
from a crystal-clear definition of the service and of service levels, back into a muddy,
legalistic puddle.

“Back full circle? It's time to start over.

“That is why this book is particularly important today. We must keep the service vision,
definition and requirements clear - even more important today in a time of loose partnerships,
complex - often virtual - supply chains and instant success or failure. In the e-world,
particularly, customers are just one click from desertion.

“Where are SLAs going? Increasingly business-focused. Increasingly measured in real-time.
Simple documents that cover complex service infrastructures. Providing competitive edge.
Embracing penalties. The brave, who commit to tight SLAs and perform against them will
win the commercial spoils.”

- Andrew Hiles, Oxon Bagpuize, England

==================================

EXCERPT FROM THE INTRODUCTION

“A sign of a maturing technology is that it gets so deeply interwoven into the fabric of
business, industry, government and society that existence without it becomes inconceivable.
Computing systems and telephony, data communication and Internet based services have
permeated virtually every aspect of life and, consciously or not, society now relies on them.
Air, road, rail and maritime control systems; banking and finance; wholesale and distribution;
transport; retail; health; leisure; manufacturing industry; government; communications and the
media - all are now as reliant upon these services as they are upon electricity, water or fuel.
Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM)
systems create inter-related dependencies throughout the organization, while the growth of
Electronic Data Interchange (EDI) and e-business extend reliance on computing from
corporate dependence to inter-corporate dependence.

“The trend towards outsourcing has exacerbated supplier dependence. Over 50% of
outsourcing contracts involve dispute at some stage - frequently ending in changing the
supplier with consequent hiatus to both businesses. The cause is usually weak contracts or
poor service specifications: how can we avoid such damaging attrition?

“Call Centers have been one of the fastest growing areas in technology over the last few
years. Many Call Center operations are outsourced. If the Call Center is unavailable, or if
response is slow, customers simply go elsewhere - to the competition. High availability and
quick response are vital for customer gain and retention.

“The rise of e-business adds to the increasing chain of interdependencies and, even more
importantly, to the speed and concatenation of the impact of loss of service or poor service.
Reliance on Internet Service Providers, Application Service Providers, Managed Service
Providers and Total Service Providers and all their intermediate suppliers means that a
failure in any link in this supplier chain becomes a failure of the whole chain, with potentially
disastrous impact: one bank has claimed that failure of their ISP service could potentially
cost
$1B in an hour.

“Yesterday's leading edge becomes today's utility and tomorrow's passé obsolescence. With
Information Technology (IT) we are constantly facing a dichotomy: how do we manage the
"bleeding edge", transformational technology as well as the well-established IT utility
services?

==================================

CONTENTS

ACKNOWLEDGMENTS

FOREWORD

PREFACE TO THE THIRD EDITION

1 AN OVERVIEW OF SERVICE LEVEL AGREEMENTS: WHAT THEY CAN
AND CANNOT DO
1.1 Introduction
1.2 Service Level Agreements: Definition
1.3 Serving the Business
1.4 Availability
1.5 Performance: Speed, Response and Accuracy
1.6 Security
1.7 Quality
1.8 Service Culture
1.9 But Why SLAs?
CHECKLIST #1.1: Service Orientation

2 THE MEASUREMENT OF SERVICE AVAILABILITY AND QUALITY: KEY
METRICS AND TECHNIQUES
2.1 Availability: Optimizing Uptime
2.2 Change Management
2.3 Problem Management
2.4 Critical Component Failure Analysis
Table 2.1: Critical Component Analysis - Cumulative Availability
Table 2.2: Contacts for Monte Carlo Analysis Tools
2.5 Relationship with Security and Contingency Planning
2.6 Scope of Service
2.7 Service Products
2.8 Service Hours
2.9 Real Time Interactive Services
2.10 Batch Services
2.11 Output Arrangements
2.12 Telecommunication and Network Services
2.13 Outsourcing
2.14 Applications Development Services
2.15 Distributed Processing
2.16 Help Desk and Technical Support
2.17 Internet and Intranet Based Services
2.18 Security Services
2.19 Special Requirements
2.20 Personal Computing
2. 21 Customer Self Computing
2.22 Training

3 HOW SERVICE LEVEL AGREEMENTS APPLY IN AN APPLICATIONS
DEVELOPMENT ENVIRONMENT
3.1 Applications Development
3.2 Development Environment
3.3 Feasibility Study
3.4 System Analysis/Specification
3.5 System 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 Introduction to Service Measurement
4.2 Measuring Performance and Availability
4.3 Monitoring Tools and Their Use
4.4 Application Monitoring
4.5 Network Monitoring
4.6 Case Study
4.7 Systems Monitoring
4.8 Satisfaction Monitoring
4.9 The Service Management Toolkit
4.10 Monitoring & Litigation
4.11 Balancing Detail with Practicality
4. 12 The Balanced Scorecard
4.13 What to include in a SLA
4.14 Shell, Template, Model and Standard SLAs
4. 15 The Service Handbook
4. 16 Service Level Survey
4.17 Charging for Services
4. 18 Infinite Capacity and 100% Availability?
4.19 Realistic Limits to Service
4.20 Penalty Clauses
4.21 Planning For Change
4.22 Organizational Issues
4.23 Preparing the Ground
4.24 Pilot Implementation
4.25 Negotiating with the Customer
4.26 Reporting Actual Performance Against SLA
4.27 Service Review Meetings
4.28 The Customer Review Meeting
4. 29 Service Motivation
4.30 Extending SLAs
Annex One: Example Customer Satisfaction Survey
Annex Two: Example Service Level Survey
Annex Three: Terms of Reference for Marketing & Sales Manager and Accounts Manager
Annex Four: Monitoring Tools - Web Addresses

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
5.6 Business Satisfaction Analysis
5.7 The SLA Payoff: A Success Story
5.8 Where Next?
5.9 Conclusion

APPENDICES

APPENDIX A: SERVICE LEVEL AGREEMENT CHECKLIST

APPENDIX B: Example Desktop Support Metrics

APPENDIX C: TRADITIONAL, IT-ORIENTED SLA

APPENDIX D: Example Simple Development SLA

APPENDIX E: Checklist for Outsourcing & Facilities Management

APPENDIX F: EXAMPLE DESKTOP SUPPORT SLA

BIBLIOGRAPHY

ABOUT THE AUTHOR

OTHER SLA TOOLS AND RESOURCES BY ANDREW HILES

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LIST OF FIGURES

FIGURE 1.2: SERVING THE BUSINESS
FIGURE 2.2 DEFINITIONS FOR TELECOMMUNICATION SERVICE LEVELS
FIGURE 3.1: DEVELOPMENT USING FPA
FIGURE 3.2: DEVELOPMENT ENVIRONMENT
FIGURE 4.1: SERVICE MANAGEMENT TOOLKIT
FIGURE 4.2: EXAMPLE OF BALANCED SCORECARD
FIGURE 4.3: THE ONE PAGE SLA FORMAT
FIGURE 4.4: THE ONE PAGE SLA FORMAT
FIGURE 4.5: COMPONENTS OF SERVICE LEVEL MANAGEMENT
FIGURE 4.6. CHARGING FOR COMPUTING SERVICES - SCHEMATIC
FIGURE 4.7. BACK-TO-BACK SLAS
FIGURE 4.8: COST OF REAL-TIME SERVICE OUTAGES
FIGURE 4.9: HIERARCHY FOR SLA IMPLEMENTATION
FIGURE 4.10: CUSTOMER ACCOUNT MANAGER: LIAISON POINTS
FIGURE 4.11A: MONTHLY REPORT
FIGURE 4.11 B: THE SAME DATA, WEEKLY REPORT
FIGURE 4.11C: THE SAME DATA, DAILY REPORT
FIGURE 4.12. SLA REPORTING SCHEMATIC
FIGURE 4.13: GLOBAL SERVICE REPORT - SCHEMATIC
FIGURE 4.14A: SAMPLE SLA REPORT
FIGURE 4.14B: BATCH SERVICE LEVEL REPORT
FIGURE 4.15. COMPUTING CENTER - MAINFRAME AVAILABILITY 0800 TO 2000
HOURS
FIGURE 4.13. COMPONENTS OF SERVICE LEVEL MANAGEMENT
FIGURE 5.1. EXPLICIT SERVICE TARGETS
FIGURE 5.2A: A CAD BENCHMARK
FIGURE 5.2B: CAD RESPONSE - BENCHMARK DRAWING TIME
FIGURE 5.2C CAD RESPONSE - BENCHMARK DRAWING TIME
FIGURE 5.2D: CAD RESPONSE - BENCHMARK DRAWING TIME

==================================

ABOUT THE AUTHOR

ANDREW HILES was the founding chairperson of EURIM, the working group supporting the
UK all-party Parliamentary Working Party on European IT legislation. He is founder and
Chairman of Survive, the international user group for business continuity planning, and was a
founding Director of the Business Continuity Institute, the international body for certification of
business continuity professionals. He is a founder Director of Kingswell, international
consultants. Having commenced his management career with the Royal Air Force, he
pioneered IT systems before leaving to take up a position within the Finance Department of
London Transport. Subsequently in their Central Productivity Unit he was a Senior Projects
Manager and later became responsible for the business re-engineering function,
implementing new services and major technical projects. He left to take up a position with
the UK Post Office as their first Business Systems Consultant responsible for major projects.

Andrew then joined the UK Atomic Energy Authority at the Harwell Laboratories where he
managed the supercomputing, mainframe and other bureau and outsourcing services.
Andrew is a pragmatic consultant and trainer in the areas of Business Continuity Planning
and Service Management

Andrew left Harwell to set up Kingswell, an international training and consulting company
specializing in service management, customer - supplier relationships and enterprise risk
management.

He has helped hi-tech, financial, transport and government bodies to develop and enhance
Service Management, Customer Support and Service Desk functions and has supported
both customers and suppliers in Service Level Agreements, Market Testing and Outsourcing.

Andrew is an international speaker on service management and has featured on conference
programs in the USA, Southern Africa, Europe, the Middle East and the Pacific Rim. He has
presented workshops and seminars on these topics for Frost & Sullivan (Europe), IIR/ IFF
(Europe and Middle East), AIC (South Africa), CEL (Hong Kong), UPOM (Middle East) and
other companies having also lectured at Ashridge, Cranfield, GEC Dunchurch and Henley
Management Colleges in the UK. He has broadcast on TV, radio and Internet webinars.

He has over 300 published articles on service management and is author of two other books
on Service Level Agreements.

Andrew is a Fellow of the Business Continuity Institute, a Member of the British Computer
Society and a Freeman of the City of London.

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Published by ROTHSTEIN ASSOCIATES INC.

2002, 278 pages. Order #DR595

Availability: IMMEDIATE - in stock.

=============================

***** SPECIAL COMBINATION OFFER! *****

Save $55.00!!!

For a limited time, special pricing is available on SERVICE LEVEL AGREEMENTS: A
FRAMEWORK ON CD-ROM FOR IT AND TECHNOLOGY and the companion book, THE
COMPLETE GUIDE TO IT SERVICE LEVEL AGREEMENTS: ALIGNING IT SERVICE TO
BUSINESS NEEDS (3rd Edition)!

Save $55.00!!!
Order #DR602A ( Guide + CD - Retail sales only; Prepaid orders only)

===============================
IN STOCK FOR IMMEDIATE SHIPMENT.
ISBN #1-931332-13-4
Order #DR595 (Guide Only).
===============================

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