The term Service Level Agreement has become such common currency in business these days that one would almost think that good effective SLAs are commonplace – and that they are effectively managed to secure predictable business outcomes. Service Level Agreements are notoriously difficult to create – the level of time and effort required to document an SLA is often underestimated by project managers and senior executives.
Over the past few weeks I have met several clients who are starting to use our SLA Monitoring tool – some of the people I met are SLA Managers who are faced with the monthly, and sometimes, weekly task of pulling together spreadsheets and reports outlining actual performance against targets. Do not underestimate the effort involved in this activity. Also do not underestimate the impact of having different spreadsheets in different formats from SLA to SLA and from month to month.
In the current economic climate companies are looking at both outsourcing and shared services to reduce cost and increase flexibility. These companies do share concerns, especially at the operational level, that there will be a loss in control over process and quality of deliverables. This article captures the dilemma very effectively. Unlike ten years ago most companies now recognise that established sourcing models such as eSCMcan now be followed to smoothen the route to an outsource or shared services. These models provide clear guidance on how these projects should be run and how risks can be managed. Building a strong partnership relationship is the key to success in outsourcing. These relationships must be based on a clear understanding of who is doing what and when – this is best captured in a Service Level Agreement or SLA. Where an SLA is clear and unambiguous it becomes a valuable document which can be referenced time and time again to clarify roles and responsibilities in outsourcing engagements.
Check this out. Let me know if you feel confident about wiriting a Service Level Agreement.
Outsourcing of HR functions is now extermely commonplace. Some aspects of HR are core to the way a business operates – being a key driver of the company’s culture and also the selection process for new employees. Nevertheless there are aspects of HR which lend themselves very cleanly to either outsourcing or shared services. Many firms outsource the administative sides of HR such as maintaining employee records and tracking event or time triggered employee activities – such as performance reviews. Other firms have embarced external providers to drive recruitment processes.
I have always wondered how long it would take for discussions about ‘commodistation’ of outsourcing to become commonplace. I think the time may now be upon us. Client organisations are increasingly demanding an approach to outsourcing which suggests that this is not the most complex business actiivty in the world but that like all projects it simply needs to be managed effectively. This latest posting in Horses for Sources seems to support this trend. The really interesting thing here is that we have always believed that companies need to start using tools to drive commoditisation and standardisation of the services that can be bought through outsourcing. Using a common SLA Management Tool like ServiceFrame companies can start to compare service levels accross their organisation much more effectively. In time the use of common portals and information sharing accross client organisations would faciliate very simple benchmarking and standard setting. Client organisations are now becoming increasingly confident that an army of external consultants is not required to deliver an outsourcing project – they will also come to realise that Service Levels and Service Level Metrics can and must be identified for all outsourcing projects. In addition clients must ensure that Service Level Agreements are measured and monitored effectively - it is only by doing this that we will truly start to build up some clear and consistent information on perofrmance against service level agreements.
Over the past few weeks I have been working with colleagues to compile a list of service providers who might be relevant and of value to our clients who are monitoring SLAs. I have no doubt that increasingly clients will want to see simple and clear SLAs before purchasing services from any service providers. This is in marked difference to the current approach where visibility of proposed service levels seems to be towards the end of the procurement process rather than the beginning. In many cases Service Providers are reluctant to be specific about exactly what service they provide and at what level – at Serviceframe.com we believe that clients will demand a change to this approach. We foresee an environement where clients can clearly see what service levels are available from whom – thereby facilitating quick decisions. In this context it is important that we all know exactly what a Service Level Agreement is.