Service Level Management

Interview on the results of the “Service Level Management” trend study

The digital transformation is in full swing: Companies are saying goodbye to outdated processes and are successful with digital business models – if the IT behind it works! amasol supports companies in properly measuring, optimizing and agilizing the performance of their IT services.
In the following interview, Frank Jahn, member of the management board and CSO of amasol GmbH, comments on the results of the trend study “Service Level Management”.

Question: You commissioned a survey on the subject of service level management for the first time. Can you briefly explain what goals you were pursuing with it?

Jahn: The topic of service level management in general is anything but new. However, in times when “cloud first” is becoming a central component of the IT sourcing strategy in more and more companies, the dependence on external service providers is also increasing dramatically. For this reason, the survey aimed to find out how relevant the topic of service level management currently is in German companies and whether its importance is tending to increase in the sign of “cloud first”.

Question: For 28 percent of respondents, the topic of service level management is already of central or high importance. A further 43 percent have at least already addressed the issue. In just under a quarter of the companies (24%), on the other hand, the topic of service level management does not (yet) play any role. How do you rate this result?

Jahn: What I find surprising is the generally high level of maturity in the area of service level management. More than 70 percent deal with this topic in their daily work. However, I am surprised that almost a quarter of the companies surveyed do not attach any relevance to this topic. This raises the question of whether trust in the service provider is replacing control in these cases, or whether the result simply reveals a lack of knowledge about efficient methods in service level management. I myself am convinced that the lack of modern software solutions for automating service level management has also played a role in this.

Question: “Better relationship management with all involved stakeholders”, “Better performance management” and “Better risk management” were most frequently mentioned as advantages of centralized or automated service level management. Do these statements match your project experience?

Jahn: I can fully confirm that. On the service delivery side, it has become established that a detailed monthly report on the respective service level agreement is prepared for the most important stakeholders. SLA violations are commented on and, in the case of correspondingly business-critical contracts, bonus/malus regulations are applied.
Organizations that have succeeded in professionalizing communication with their customers via SLAs see another major advantage in the image boost that this brings. Other organizations control the optimization of their IT infrastructure by analyzing the availability and/or performance figures collected by means of service level management. In some cases, this goes so far that management salary bonuses are linked to compliance with SLAs.

Question: The most frequently cited obstacle to implementing automated service level management was the lack of flexibility/scalability of the existing solution or process. How can companies overcome this obstacle?

Jahn: In most organizations, SLA reporting is a labor-intensive process. Therefore, many try to limit this high effort only to the large/important customers. On the other hand, people know that high service quality leads to a good image and possibly even to competitive advantages. In this area of tension we as amasol see an opportunity. With our experience from more than 15 years of consulting in the SLM environment, we have now decided to develop a modern software product for the automation of service level management. The goal is to increase the efficiency of SLA reporting and to offer it as a standard for as many IT services as possible.

Question: Slightly more than half of the respondents (56%) stated that there is not yet an established process for service level management in the company. The same number of survey participants stated that they do not yet use a special software solution for service level management. How do you rate this result?

Jahn: This confirms that SLA management and reporting can be very time-consuming and that many people shy away from it. That’s why we place so much emphasis on maximizing the degree of automation of SLA reporting. Our pilot customer, who has already achieved a high level of automation over the last ten years, appreciates the further development and performance of our solution.
I think if more was known about how easy and lean SLA management can be set up, it would change the numbers. We are working to increase confidence in SLA management. It’s clear that many organizations already have basic service level management in place. But I think that this topic permanently needs some attention and further development. We want to make a contribution here and are already getting very positive feedback from our pilot customers. We therefore believe that the SLM potential is far from exhausted.

Question: More than half of the companies surveyed (54%) are in the process of continuously developing their SLA reporting (26%) or optimizing the process for service level management (28%). One in ten survey participants indicated that there are plans to establish centralized service level management in the near future. What advice can you give these companies when it comes to establishing central service level management or optimizing the existing SLM system?

Jahn: The responses on the future of service level management in this study confirm our market observation and forecast that the relevance of the topic of SLM will continue to increase. My tip for successfully implementing comprehensive service level management is to ensure that the agreed SLAs are firstly measurable and secondly not too complicated. Furthermore, a guaranteed performance indicator increases the image gain if it is proven that it has been achieved. In general, the results must be traceable. No customer accepts “watermelon SLAs”. I know of a case in practice where a large IT
organization has concluded SLAs for over 3,000 services and is now managing them successfully. In my opinion, you can achieve a lot with automation.

Question: Finally, a personal conclusion on the results of the “Service Level Management” trend study: Was there one result that particularly surprised you?

Jahn: I found it very exciting that provisioning time was named as the third most important measurement criterion. In my opinion, this shows how much the large cloud providers have already influenced the expectations of customers, but also that IT organizations must meet these expectations – namely by monitoring and documenting precisely this key figure.