Companies that purchase software as a service should consider Gartner`s advice and advice on best practices for service level agreements. Management Summary The use of Service Level Agreements (SLAs) for the sole purpose of measuring results will not pass in today`s chaotic and competitive business environment. The ALS process must go beyond simple measurement and include a methodology for continuous management of service levels and continuous improvement of service activities, functions and processes. This strategic analysis report provides a detailed and gradual guide to the two main phases of a successful ALS process: the development of ALES and the management of the ALA. The key to the development phase is the definition of service level requirements and measures — a process conducted jointly by the service provider and IT staff of the recipient and end-user community. Together, this team identifies key indicators that focus on the professional needs of recipients. In this report, we provide guidance on critical aspects of this process, including identifying requirements and commercial drivers, defining service level targets (SLOs), defining target metrics with clearly defined data points, and defining responsibility for achieving SLOs. These elements form the basis for effective management of ALS, an iterative process that begins at the end of the development phase and continues over the life of the service relationship. Steps in this process include measuring service activity results using defined SLOs, analyzing measured results for problem identification and cause analysis, implementing appropriate corrective actions, and managing service activities to preserve the benefits generated by these corrective actions. The development and management benefits of the ALS approach described in this report go beyond creating a productive and successful outsourcing relationship. The results of the process will provide service recipients with the opportunity to obtain the additional business benefits of better competitiveness, measurable productivity, etc.

If service level agreements are based on actual business requirements and have been successful in increasing value, I-O executives can build positive business relationships and address opportunities for improvement. Use Gartner`s approach to service level management to initiate or improve your ALS goals. A service level agreement is a formal document that defines a working relationship between different parts of an organization by establishing a common understanding of services, priorities and responsibilities.

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