Incorporating Business Impact into Service Offers - A Procedure to Select Cost-Optimal Service Contracts

Provided by: AIS Electronic Library (AISeL)
Topic: Project Management
Format: PDF
In this paper, the authors address an IT service customer's challenge of selecting the cost-optimal service among different offers by external providers. They model the customer's optimization problem by considering the potential negative monetary impact of different combinations of sequential service incidents on a customer business process - reflected via "Business cost". They describe which information a customer typically bases service level agreement decisions upon and analyze which additional information is needed to take a well-founded decision. Then, they define a set of constructs that supports customers and providers when selecting or defining service offers, which address the required service criticality. And they develop a procedure enabling customers to solve their optimization problem - given different service offers by risk-neutral providers - using a procurement auction.

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