Service Level Management - Measure the Outcomes, Not the Process

I hate SLAs. Or rather, I hate the way SLAs are commonly used. All too often, they are used as the outcome of Service Level Management; much the way the Service Desk is frequently equated to Incident Management. Yes, each is very important to the other, but they don't define each other.

I wrote about the relationship between Service Management and Service Level Agreements (SLAs) a few months back.  I won't rehash the whole thing, but the point was that SLAs, especially when done as formal contracts with internal customers, create more harm than good.

Service Level Management, or SLM, is far more complex than simply meeting contractual targets. The latest episode of the Practitioner Radio podcast, "The Evolution and Children of Service Level Management", explains it very well. It was nice of Chris and Troy to cover this while I was writing this entry. I highly recommend that you take the 23 minutes to listen. They have a great discussion about the role of SLM, compared to its "children": Business Relationship Management, Service Catalog, and Service Owner. I'll post some of my own thoughts about the role of SLM sometime soon.

This time, however, I'd like to look at metrics around SLM. How do you measure the relative success of SLM? All too frequently we look at adherence to SLAs as the beginning and end of measurement.

"If I meet my defined SLAs 90% of the time, we have a solid service management practice. Right?"

• When was the last time an irate customer was placated by that statement?
• When was the last time your partners in the business recognized IT's significance through that statement?
• When was the last time you generated business value with that statement?

I didn't think so. Now an argument could be made that the SLA is a fine internal measurement to identify process efficiencies, but no one outside of your IT shop cares about efficiencies. They might pay it some lip service, but that's when they only see IT as a cost to be minimized. It's time to focus SLM on what it does for your business. I've got a few ideas based on my own observations, and aggregating observations of ITSM pros around the world.

• Kill the SLA

First, remove the concept of contracts between service providers and their internal customers. SLAs done this way create an us-versus-them mentality right from the start. You work for the same business with the same business goals. Contracts with your business peers are a primary reason everyone else hates IT. If you are an external service provider that must have SLAs, make it clear that SLAs are the minimally acceptable target, not the desired goal.

Replace the formal SLA with documented targets. It may sound like just a semantic change, but it's more than that. It's a completely changed mindset. These targets should NOT be based on what IT can do, they are based on meeting and exceeding the three foundations of business strategy:  Business Goals, Business Objectives, and Business Mission.

• New Measures

Based on these new targets, start measuring the impact on current

1. Business Goals
2. Business Objectives
3. Business Mission

Let's say a business unit has a goal to increase revenues by 20% this year. Meet with the B.U. to determine how they are planning to hit their goal, and how your services can help them get there. Focus your service targets specifically around these things. 

• Continuous Review

You now have targets that you can measure and share with your partners. Meet with these partners regularly to review how well the targets have been met. Then ask the crucial question: Are they on track to meet or surpass their targets? If the answer is yes, and you've met your own targets, you now have a clear connection between the value being delivered by your SLM. If the answer is no, but you are meeting your service targets, there is a clear indication of disconnect between SLM and business goals.

Honestly, who cares if IT hits their targets if the business is not hitting theirs? Service level targets must be regularly reviewed and updated as needed in order to continue meeting business goals, objectives, and mission.

If you're doing anything else, you are failing. Period.