Advanced How To Guide

Choosing eBusiness vendors and software

2.07 Service Level Agreements

A service level agreement (SLA) outlines the rights and obligations of both the customer and the service provider in measurable terms, and it states the consequences if the eBusiness vendor fails to deliver on its guarantees.

An SLA should clearly define the responsibilities of the vendor and specify the required quality of service - in measurable terms. But defining those terms can be difficult. For example, a provider may guarantee uptime of 99.999% (the much ballyhooed 5 nines), but they may not count planned downtime from maintenance or short outages, such as the 10 minutes it takes to reboot a machine. It is important to make sure that an SLA guarantees the uptime for the entire infrastructure involved in the application - hardware, software and network - and even the
parts that the provider gets from subcontractors.

SLA terms vary according to the type of agreement you have. There are at least four distinct types of SLA.

1. Network SLAs
Network SLAs cover the network connection between the customer and the eBusiness Vendor. The network service provider agrees upon a suitable service level for the delivery of IP services. Possible metrics include availability, network latency, or low packet loss.

2. Hosting SLAs
Hosting SLAs cover the hosting services provided to the eBusiness Vendor. An eBusiness Vendor uses this type of agreement when hardware is hosted or collocated with a third party. Metrics vary, depending upon the type of service performance, service-order acknowledgement, and mean time to respond. As a customer, you should also see this document to ensure that the eBusiness Vendor will be able to deliver as promised.

3. Application SLAs
Application SLAs measure application performance. The eBusiness Vendor agrees to a certain level of responsibility, different classes of service, performance parameters, and a manner of calculating both the demanded performance levels and penalties that result if the eBusiness Vendor doesn't perform its services as planned.

4. Customer care/help desk SLAs
Help desk SLAs refer to the point of contact for the customer with the eBusiness Vendor. These SLAs may specify how quickly a problem will be reported to the customers after it has been identified and how quickly an identified problem will be resolved.

2.08 Monitoring the Relationship

Good contracts do not run themselves; they require a contract management team that keeps the relationship in good working order. This team should ideally represent a cross section of the people in your organisation who are working on, and affected by, the vendors work. It is important to include business and technical people on the monitoring team even when the nature of the project would seem to suggest that it was either technical or commercial.

The contract management team should meet at regular intervals - probably at least monthly - and should have a performance, rather than control, remit. The sessions should be structured and conducted in a manner than facilitates development and improvement. In addition to periodic meetings, more frequent basic reporting may be required - for example, a weekly run of key performance statistics.

It is important not to rely exclusively on the formal monitoring structures you put in place; vendor relationship management should be a continuous personal process. A single overall point of contact should be established between the organisations and information and ideas should flow freely and informally through this channel. In addition, specific people within each organisation should be identified for specific problem resolution - for example, for network outages "Mary" should contact "Bob". This fosters ownership of particular functions and avoids multiple complaints to multiple inappropriate people - a relationship wrecker.

Finally, contracts have an endpoint, as well as a run-time, and some terminate early. Careful consideration should be given to transition arrangements such as data transfers and the preservation of historical data.