Keep up-to-date with ITIL news. Low volume to-the-point bulletins...
ITIL Service Level Management
ITIL Service Level Management (SLM), encompassing Service Level Agreements (SLAs), Operating Level Agreements (OLAs), Service Catalogues, Underpinning Contracts (UPCs) is more important than these documents suggest. It is a key IT Service Management discipline, and may well be the first point of reference when considering ITIL implementation within an organisation.
SLM relies on the service provider(s) being able to commit to SLAs. This, in turn, implies that some basic service support disciplines (especially Incident and Change Management) are in place and robust enough to allow this. If this not the case SLM will need to manage Customer expectation carefully until the service provider(s) can commit to formal SLAs.
SLM defines and negotiates SLAs for the services being provided to Customers. It takes input from all the parties involved including Customers, end-users, IT support, operations and third parties. This allows SLAs to reflect Customer requirements as well as address technical, capacity, availability, operational, support and financial issues.
Operational Level Agreements are agreements that are between internal support groups.  There aim is to ensure that support groups respond and resolve Incidents and Changes in a timely manner so that the overall is not breached.  An example could be the new Starter process (Standard Change Management) where many groups are involved from procurement to Desktop support, each group will be aware of how much time to spend on their task before it passes to the next team.  All these individual pieces of work will help form the SLA with the customer.
Quite often Underpinning Contracts will also have to be put in place. As their name suggests these are contracts with third parties and support elements of service provision as defined in SLAs (such as final line support for applications software).
The fundamental difference is that an SLA is an agreement, where as an Underpinning Contract will usually contain financial penalties.
SLAs inevitably require a degree of compromise and this is usually based around the priorities of service provision, its capacity and availability and cost. A formal and consistent approach enables SLAs to be created which are achievable at an acceptable cost. Once SLAs, OLAs and associated Underpinning Contracts are in place, service performance should be monitored against the targets set in these documents. Reports on this should be the subject matter of regular reviews with Customers and Suppliers. Also where performance does fall below acceptable levels this will trigger corrective action which SLM will monitor carefully.
Before introducing SLM it is important to understand the Customers' (including users) current perception of service so that the effectiveness of SLAs, when they are introduced, can be measured. This may also help to indicate the pace at which to proceed and to identify priority services. 
If service monitoring is not yet in place a Customer satisfaction survey may provide the information needed. This should collect views at management and users levels as well as those of the service providers to create as holistic a picture as possible.
Once this initial stage has been done a SLM Implementation project can be developed. It is important that it is treated as a project rather than being allowed to grow organically.  The project approach will ensure that priorities are handled correctly and that any issues/risks are highlighted and dealt with in a manner approved by the Project Board. Once elements of the project are delivered (SLM process, Service Catalogue, SLA structure) these will become operational and be measured as agreed. Reviews, at regular intervals, will ensure that all elements of SLM are effective and efficient.
Benefits of ITIL Service Level Management
Effective SLM can provide significant financial savings through managing improvements in service quality and reducing service disruption. This should lead to less time and effort being spent by IT staff in resolving failures. Customers and users should be able to perform their business roles with much less disruption caused by IT service issues.
Other benefits include:
  • IT services designed to meet Customer's Requirements
  • Improved relationships with satisfied Customers
  • Parties to SLAs and Underpinning Contracts have a clearer view of roles and responsibilities, helping to avoid potential misunderstandings or omissions
  • Specific targets to aim for and against which service quality can be measured, monitored and reported
  • IT effort is focused on those areas that the Business thinks are key
  • IT and Customers have a clear and consistent expectation of the level of service require
  • Service monitoring allows weak areas to be identified so that remedial actions can be identified and undertaken where appropriate
  • Service monitoring allows the performance of suppliers (internal and external) to be evaluated and managed
  • SLAs can be used as a basis for service charging and help demonstrate the value for money Customers are receiving
Over time there should be improvements in service quality and an overall reduction in the cost of service provision so Service Level Management should be high on the list of things to get right!
Costs include the following:
  • Staff costs (salaries, training, recruitment costs, consultancy), both initial and ongoing
  • Accommodation costs
  • Support tools (monitoring and reporting, plus a portion of the costs of integrated service management tools)
  • Hardware to run these tools
This spend is really an investment and should provide a reasonable return in the medium to long term.
Potential Problems
These include:
  • Monitoring of pre-SLA service achievements and reconciling this with the perception held by Customers and users
  • Ensuring service performance targets are achievable before committing to them
  • Verifying that service performance targets are appropriate and affordable prior to agreement
  • Producing SLAs that are based upon desires rather than achievable and acceptable targets
  • Not enough seniority/authority given to SLM to carry out negotiations and push through service improvements
  • SLAs not being supported by adequate contracts or underpinning agreements 
  • Responsibilities of each party are not clearly defined creating a danger that somethings fall 'between the cracks' and the ensuing confusion and frustration that brings
  • Being based around IT considerations rather than being business-aligned, especially where the business cannot articulate its requirements clearly
  • SLAs being too lengthy, not concise, not focused or individually hand-crafted
  • SLAs are not properly communicated


2012-06-18 by "gpignatelli"

Hi, the article is really interesting but has anybody tried to quantify costs of SLM and the potential benefits / savings?

Please submit any comments you have about this article.

Your feedback will help add value to the content for other visitors and help us develop the content for the benefit of all.

You will need to provide and verify your e-mail address but your personal information will not be published or passed on to others. To identify each post we take the part of your email address before the @ sign and use that as the identifier, so if you are your post will be marked "by john.smith".

NB: We respond personally to every post, if it calls for it.

If you prefer to respond without posting your comment please use our contact form.

Click the REVIEW button below to preview your comments.

Tags; Service Level Management, Service Level Agreements, Service Catalogues, Underpinning Contracts, ITIL implementation, operational, support
This article has been viewed 25647 times.
NB: This page is © Copyright and / or the relevant publishing author. You may copy this article only in it's entirety, including any author bio and / or credits, and you must link back to

Keeping up-to-date with ITIL...

Keep up-to-date with ITIL news. Low volume to-the-point bulletins...