Project Management

Arranging the pieces of the service level management puzzle

How do you hammer out a reasonable service level agreement? Learn about the importance of service level objectives in ensuring that your IT department is correctly interpreting business needs.


By Rocky Kostick

Negotiating service level agreements (SLAs) with the business units you serve is one large piece of the service level management (SLM) puzzle. But it takes meticulous planning, patience, and an eye for the right angles to take a pile of useless, independent pieces and end up with a well-designed strategy. The strategy needs to manage the services provided by IT and balance them with the expectations established with your customers.

Service level objectives
Because the strategy balances customer expectations with the services that are being delivered, it’s necessary to have service level objectives (SLOs). Service level objectives are a critical component of SLM. Basically, SLOs are the interpretation of business needs into tangible, measurable IT services and objectives. SLOs are the byproduct of the SLA process and are wholly owned by IT. These are the objectives that are defined by the IT units based on what SLAs have been constructed with the business units.

For example, a business unit may ask for encrypted security to support financial transactions across the network. From an IT perspective, the objectives necessary to support the terms of the agreement will require additional technology to ensure security requirements are achieved. Additionally, the objectives will require the technology in place to monitor and ensure compliance within the objectives.

Service level objectives help align IT to support those business initiatives and meet the SLA that has been defined by IT and the business units. These services and objectives must be managed during the design, build, and manage phases of the various initiatives.

Translating the SLO
Once the SLOs have been determined for IT, they need to be further translated into coordinated action items and responsibilities for various parts of the IT organization. The translation of business needs into SLOs drives specific tangible, measurable services, and objectives on various data elements for IT operations, such as service delivery systems, management, and reporting.

To ensure that both strategic and tactical decisions can be made appropriately:
  • The source of the data needs to be determined.
  • The applicable data needs to be collected.
  • Proper information needs to be derived.

Here’s the sequence of agreements that need to complement each other:
  1. SLM requires translation of business needs into SLAs.
  2. SLAs require translation into SLOs.
  3. SLOs require the establishment and management of operating level agreements (OLAs).

OLAs are similar to SLAs, but they are established through IT with both internal and external service providers. The OLAs help establish the expectations and parameters necessary to support SLAs.

For example, if there is a problem with a component of your infrastructure that requires an external vendor (i.e., satellite, T1, etc.) who has contracted for a three-hour resolution time, IT must develop an SLA with that time frame built in. How much time will it take to develop a complete solution after the external provider has finished with its responsibility?

These time frames and interdependencies need to be considered before the SLA can be developed, and then managed through the expectations established by way of the SLA. For the objectives to be met, a solution involving all aspects of the infrastructure need to be defined in order for the terms of the SLA to be met and the puzzle pieces arranged to complete the picture.



This illustration represents consistent, unified SLAs developed by both IT and the business units. The SLAs are then translated into objectives that IT needs to meet. Finally, OLAs must be made by both internal and external vendors to make sure that SLAs are met.

Rocky Kostick is currently the central region's director of business development for Synet Service Corporation, an e-infrastructure management consulting company based in Minneapolis. He previously managed IT operations for a major financial institution with direct responsibility for support and change management. Rocky has been the program director for Synet's Enterprise Systems Management program and also managed key problem, change, asset, and systems management consulting engagements with multiple Fortune 500 clients. Rocky has written Synet white papers and also contributed his service level management expertise to a chapter in the World Class IT Service Management Guide.

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