Service Level Management & Monitoring

When contracting a vendor or managed service provider, one of the main sticking points is whether both customer and supplier are on the same page regarding quality expectations. The higher the dollar value invested in this engagement, the greater the requirement to meet certain service performance targets.

Of course, the vendor’s sales team is quick to provide lofty promises at the start to close the deal, but reality hits once the customer starts feeling shortchanged…when experienced downtime and service degradation is met with winded explanations, references to fine print, and low-level service credits that do nothing to address the lost opportunities and negative experience.

In this article, let’s look at the activities involved in service level management and monitoring, as well as some tips from industry best practices.

What is service level management?

The service level management practice helps to set and manage a shared view of the quality of services between the service provider and the service consumer. According to ITIL®, the purpose of service level management is to both:

• Set clear business-based targets for service utility (functionality), warranty (performance) and experience (satisfaction).
• Ensure that service delivery and use is properly assessed, monitored, and managed against their targets.

These targets and related terms are usually described in a formal or informal manner, depending on the level of involvement that the customer has.

Traditionally a documented service level agreement (SLA) has been the standard approach to outlining service levels in the form of availability, response, and resolution times. However, in modern times, more organizations are switching to defining service targets within service offerings, where customer can select the options that match their pocket.

Activities in service level management & monitoring

Generally, there are some key activities that encompass how service level management and monitoring happen in an enterprise. How they are carried out differs mainly due to the type of service or relationship model. Here is a general overview of how they occur:

1. Definition of customer requirements

For a customized service, the customer communicates their service requirements based on their business needs, either by selecting predefined options shared by the service provider, or generating their own list together with the service provider’s client facing staff who put together a requirements document.

2. Viability analysis

Here the customer’s requirements are analyzed to determine how feasible it is for the service provider to meet them, and at what cost and risk. For out-of-the-box solutions, this analysis is done by the customer as a confirmation of selected options.

3. Drafting the SLA

The service provider drafts an SLA in line with the viability analysis and presents it to the customer with options. For predefined options, the SLA is simply generated off the customer’s selection for review.

4. Negotiating the SLA

This step involves a discussion of the draft SLA and negotiation of changes based on the viability analysis and the customer’s budget.

It may take several iterations with the previous step before an agreement is reached where both parties feel that they are getting the best value. For out-of-the-box options, the only activity here is when the customer has questions or requires clarification of the options they have selected before acceptance.

A traditional SLA would be signed by both parties on a document, while other options just involve a digital acceptance of terms by the customer.

5. SLA communication and enablement

Upon agreement, the SLA is communicated to both parties, usually as a signed document emailed or delivered. Then the service provider goes about provisioning and onboarding the customer into the service.

A digital out-of-the-box service may be ready for use immediately through automated means, while other complex services may involve a project initiated to configure the service provider and customer resources to a level where the services can be consumed.

6. Service quality monitoring

Here, the service provider monitors the performance of resources in line with the service targets agreed in the SLA as well as tracking the workload against the workload limits such as system or human resource capacity.

Some service providers invest in a Network Monitoring Centre (NOC) where monitoring systems generate alerts on any service disruption or degradation that goes beyond the SLA targets.

Any issues encountered are addressed using relevant processes such as incident management, problem management, information security management, and service continuity management. Some of the service quality data is availed to the customer in form of dashboards.

The customer as well monitors the service and raises any issues or provides feedback on quality to the service provider as needed.

7. SLA review

A formal review of the SLA may be triggered by:

• A predetermined schedule
• An event such as customer request
• Changes in the service environment

Reviews usually consider the past performance against targets, as well as overall customer experience. The outcomes of reviews can lead to prolongation, or withdrawal.

8. SLA continuation

Should both parties feel the need to continue the SLA, then communication is sent out for continuation where extensions are formally agreed through contracts and billing. Changes are usually incorporated at this point based on the SLA review such as adjustment to targets, penalties, workload limits, or exceptions.

9. SLA withdrawal

Should either party feel that the SLA does not work for them, or their context no longer aligns with the service offering, then a withdrawal is triggered. This involves formal communication to all stakeholders, then a planned withdrawal based on contractual terms. A project may be required where the service provision model is complex and transition has to be handled carefully especially where provider and customer resources are intertwined. For instance, customer data may need to be transferred to a predefined location or be deleted upon ample notice.

Best practices and tips

There is no possible scenario where both service providers and their customers have a 100% agreement and mutual satisfaction with service level expectations and their management. Because services, stakeholders, and their contexts are varied, it is impossible to create definitive rules that cover all scenarios.

So, how can service providers and their customers have a better appreciation and understanding of service level management and monitoring? Let’s consider the ITIL guiding principles that can help us navigate this tipping point:

1. Focus on value. Service providers should consistently interrogate why customers are using the services i.e. what outcomes they are trying to achieve, and what benefits are they seeking. Then when defining and managing service levels, use these as the main benchmarks rather than nitpicking on technical details.
2. Start where you are. Consider service levels as evolutionary rather than fixed. Build trust, reference industry benchmarks, and work together towards a win-win situation where both parties feel that their expectations are being met to the best of the other’s abilities.
3. Progress iteratively with feedback. Constantly review and update targets and monitoring capabilities, and incorporate customer feedback to ensure that service level management and monitoring remain relevant to both the provider’s and customer’s contexts.
4. Collaborate and promote visibility. Share information regarding changing needs and environments. Monitoring tools used by the service provider should provide views for the customer to access so that both parties are on the same page in terms of service performance, workloads, and exceptional circumstances. Avoid “watermelon” SLA scenarios (green on the outside for the provider, red on the inside for the customer) and ensure clear ownership of services and associated components.
5. Think and work holistically. Consider all dimensions when coming up with SLAs that cover not just technical aspects, but also business outcomes, and customer experience. Use monitoring capabilities to unearth any relationships and dependencies that may be overlooked in capturing the entire service delivery lifecycle.
6. Keep it simple and practical. For legal and regulatory reasons, there may be a requirement to load SLAs with clauses that protect both parties. However, at the core, the essence of the SLA and expectations of both provider and customer should be clear and understandable to the people on the ground involved in actual delivery and usage of the services. Eliminate jargon, unnecessary complexity, or conflict with overall value aspirations.
7. Optimize and automate. Regularly review the structure of SLAs to make them optimal in view of evolving needs and deploy monitoring solutions that leverage capability such as dashboards and AI to consolidate, analyze and visualize service level management data that points to value and outcomes achieved by customers.

Service levels are about improving, not just maintaining

At the heart of service level management should be a focus on improvement rather that just hitting a target. Improvements can focus on enhancing service quality, monitoring pain point sources, or redefining how the service levels are set based on evolving needs and contexts.

By incorporating customer feedback from satisfaction surveys and other experience measures, service providers can focus on improving what matters most and demonstrate continual value generation which is at the core of service level management.

FAQs about Service Level Management and Monitoring