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Using Service Level Management (SLM) to Improve Service Value & Costs

A trend and direction for IT organizations over the past 5 years or more has been structuring and managing IT organizations to run like a business. This implies that IT has the capability to provide value based services that in turn support business growth and employ a service based delivery model.  The concepts of providing IT services are the same as any other consumable service we know of today. The basic tenants of service are; it needs to be simple to order, it needs to be priced in alignment with value, it needs to provide a benefit and the consumption of services needs to be reported in a way that the customer could manage their demand.  What defines IT’s customer relationships is service value and performance. Service performance is measured and service value is managed through the Service Level Management process.

Service Level Management (SLM) is a process in the ITIL Service Delivery model that is considered to be one of the most critical service management processes.   The objective of SLM is to design and manage meaningful, and measurable, metrics around service performance that is in direct alignment between the IT service and the business processes of their customers.  The commitments to service are outlined in service level agreements (SLA’s) and managed through the SLM process.

Developing meaningful SLA’s to support the customers’ business processes and managing them through a consistent SLM process could provide measurable benefits in a number of areas:

  • Service Quality – the old adage “you can’t manage what you can’t measure” applies. Service performance measured by the agreed upon SLA provides insight to service improvement opportunities on a routine basis.  The cycle of service level management and service improvements directly influences service maturity and quality.
  • Service Cost – as part of the service level management process, service events that impact service performance are identified through incident, event, capacity and problem management. Quantifying and qualifying service constraints provides insight to root cause data that could be used to improve and evolve the efficiency of delivering the service.  There is a direct relationship between service efficiencies and the reduction of workload. Together these represent drivers to operational cost reductions.
  • Service Capability – delivering services is not a static event in fact it is the opposite. Service delivery is very dynamic and needs to adapt and evolve as outside influences come into play like change in business, technology or completive threats. Through SLM the need to evolve the service will become evident. This will drive the need for IT to improve its capabilities and evolve to support the changing business landscape.
  • Service Value – as mentioned previously, service value is determined by providing a portfolio of well-defined and aligned services to the needs of the business and performing to SLA expectations. Engaging in a best practice service strategy and design process supported by a SLM process provides the framework to ensure IT is delivering service value. Driving IT up the maturity curve to the point of adding value is the point in the journey where IT is considered a valued partner to the business. Service Level Management is highlighted as an opportunity to drive value and influence positive change across the organization. It represents only one process within an integrated service delivery model.  It is a piece of the overall IT Service Management process model and cannot provide the expected benefits without the integration and support of the other process areas.

SLM within the context of industry best practice service management will provide overall benefits of improved service value; cost efficiencies improvements and better process controls.

For further reading click here: First Things First in Demand Management

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