Most large companies have adopted formal IT service level agreements (SLAs), but new research suggests that these are met only three-quarters of the time.
The research by Forrester found that the primary reason for missing SLAs is that the business unit has expectations beyond the reach of IT. The IT-centric service levels are not compatible with bottom line objectives.
These problems have been mirrored within the outsourcing industry. Executives within outsourcing constantly complain that outsourced IT is not delivering bottom line benefits. IT, both in-house and outsourced, needs joined up thinking to succeed.
There is no point having SLAs if a) the implementers do not know what they are and b) if they are not directly relevant to the business. Having service level agreements is a fantastic way to measure a service being delivered, but they are of little use if the service itself is not the right service that the business needs or if suppliers can’t actually deliver them.
I think that it is interesting that Forrester suggests that end user monitoring as a way of measuring results. Of course it is the end user that is paying for the supplier so in theory they should be the one that gauges the results.
However, practice can work quite differently to theory: end users can’t be the only determinants of success because they can put suppliers over a barrel because there might be “customer” induced reasons for service reduction (such as change).
Like the project itself, the determination of success in outsourcing needs to be a joint venture. If an outsourcing project has been a truly collaborative effort, with end user input throughout, then a similarly joint approach to measuring success should be found.
In fact the NOA recently carried out research onto Business Orientated Metrics (so called BOMs), basically measuring performance and rewards based on delivering continuous business benefits.
Another great idea applauded by users and suppliers, but our research showed only 4% of contracts had some element of BOMs within it. Maybe IT orientated SLAs are just easier?