IS Scorecard: Service Level Management

June, 2004

Service level management (SLM) is a key IT discipline that establishes controls in support of the corporate business imperatives and service-level objectives across the entire IS organization. Basically, SLM provides the mechanisms for establishing level of service expectations associated with each product or service provided to an IS customer. This includes developing and managing processes, policies, procedures, and the support staff required to effectively execute this critical discipline.

Service level agreements (SLA) establish the baselines that will be used to monitor the effectiveness of this discipline. SLAs should be directly tied to the business mission of each customer supported by the IS organization. Each SLA must have clear and measurable objectives if this is to succeed. These objectives should establish minimally acceptable metrics for each of the following:

  • Support and problem resolution
  • Performance
  • Capacity
  • Availability of service
  • Response time
  • Security and incident management
  • Rate of change
  • Quality of service
  • Data integrity
  • Disaster recovery and business continuity

For an SLM strategy to work effectively, the IS organization must establish internal service level objectives (SLO) that support each metric for each SLA to be managed. Failing to establish internal commitments that are tied to the external commitments established with the customer will usually provide unsatisfactory results–and frustrated users.

According to Computer Economics’ recent research on service level management, many IS organizations are doing a poor job of managing this discipline, with only a small percentage reporting they are very effective in managing their service level strategy.

In our annual study on IS management disciplines only 15% of the managers reported that their SLM strategy is being very effectively managed. Another 28% reported this discipline is effectively managed in their organization, however, over one-third of the managers in our study of over 215 organizations reported this is only minimally effective in their organizations. Worst of all, a high percentage (22%) reported their service level management efforts are not effective at all.

Considering this is one of the key customer-facing disciplines that IS must manage, the dismal showing illustrates that many IS organizations still have a significant disconnect in developing an overall business alignment strategy. A service level management strategy must become an integral part of an overall strategic plan and business alignment strategy. In fact, it is the key mechanism required to ensure that the overall strategy is executing properly.

June 2004

This data was compiled from our annual study, Information System Spending & Technology Trends 2004/2005 . This annual study is the premier IS benchmarking and trend report available on the market. It is an invaluable IS management tool that has been used by hundreds of managers and executives for the past 15 years. For additional information or to purchase the Information System Spending & Technology 2004/2005 study, please contact us at 1-800-326-8100, ext. 51.