The document discusses key factors to consider when designing a balanced service level agreement (SLA) that benefits both users and providers. It identifies 10 critical SLA elements: 1) empowerment, 2) escalation, 3) peer relationship, 4) informal communication, 5) establishing a contract team, 6) prioritizing action items, 7) addressing strategic issues, 8) considering geographical differences, 9) using steering committees, and 10) selecting an account manager. For each element, the document outlines the impact, motivators, and inhibitors from the perspectives of both the user and provider. It also provides examples of an SLA structure and change management form.

1. SLA
Conference
Designing a Win-Win SLA
Win-
for Users & Providers
- Key Factors to Consider
By Dr Fung Han Ping
Solution Architect
Hewlett-
Managed Services – Hewlett-Packard
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2. SLA Establishing a Balanced SLA Contract
Conference
1. Empowerment 2. Escalation
10. Account Managers 3. Peer Relationship
User's Expectation: Provider's Expectation:
1. Control on Delivery 1. Entrepreneurship to Exceed SLA
9. Steering 2. Business Growth 2. Capabilities & Resources Availability
3. Best Quality Service 3. Acceptable Service
Committees 4. User Satisfaction 4. User's Loyalty 4. Informal
5. Lowest Cost 5. Highest Profit Communication
8. Geographical SLA
Differences 5. Contract Team
7. Strategic Issues 6. Prioritize Actions
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3. SLA
Conference
User & Provider SLA Expectations
User Provider
1. Control on Delivery 1. Entrepreneurship to
Exceed SLA
2. Business Growth
2. Capabilities &
3. Best Quality Service Resources
Level Fulfillment Availability from
4. User’s Satisfaction Provider’s
organization
5. Lowest Cost
3. Acceptable Service
Level based on
Economic of Scale
4. User’s Loyalty
5. Highest Profit
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4. SLA
Conference
Empowerment
Critical SLA Element - 1
Empowerment User Provider
Impact • Proactive SLA decision • Proactive SLA decision
making & delivery mgmt at making & delivery mgmt at
lower level to receive quality lower level to deliver
service (reason they are the acceptable service
actual user/involved who • Encourage entrepreneurial
knows what is quality service) provider to deliver innovative
• Tie part of user’s staff services
remuneration with the • Tie part of provider’s staff
successful service level remuneration with the
fulfillment successful service level
• Fewer escalation to mgmt fulfillment
which will reduce their time
cost
Motivator Delegation from higher user’s Delegation from higher
mgmt provider’s mgmt
Inhibitor No trust on user’s subordinate No trust on provider’s
subordinate 4

5. SLA
Conference
Escalation
Critical SLA Element - 2
Escalation User Provider
Impact • Resolve SLA issues at the • Responsive to user’s SLA
higher level which brings issues which brings
satisfaction to user mgmt acceptable service level
• Align technical/operational • Immediate addressal of SLA
service levels with issues at higher level which
business/corporate brings user’s satisfaction
expectations
Motivator Proper user’s escalation plan Proper provider’s escalation
plan
Inhibitor • Confuse or non-existence of • Confuse or non-existence of
proper escalation plan proper escalation plan
• No enforcement on • No enforcement on
implementation of the implementation of the
escalation plan escalation plan
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6. SLA
Conference
Peer Relationship
Critical SLA Element - 3
Peer User Provider
Relationship
Impact Develop friendship & in-depth Develop friendship & in-depth
understanding to grow user’s understanding to support
business user’s business grow
Motivator • Informal appointments •Informal appointments
• Team building sessions •Team building sessions
• Fun activities •Fun activities
Inhibitor Lack of relationship building Lack of relationship building
activity activity
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7. SLA
Conference
Frequent Informal Communication
Critical SLA Element - 4
Frequent User Provider
Informal
Communication
Impact • Knowing provider’s • Knowing user’s requirements
requirements better before better before managing their
managing their SLA SLA expectations
expectations • New entrepreneurial ideas
• New ideas & issues generation, brainstorming
generation, brainstorming & with delivery actions
delivery actions
Motivator Informal meetings without • Frequent visitation to user’s
schedule premises for informal
meetings
Inhibitor Over emphasis on formalized Over emphasis on formalized
meeting meeting
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8. SLA
Conference
Establish a Contract Team
Critical SLA Element - 5
Establish a User Provider
Contract Team
Impact • Jointly develop SLA that • Jointly develop SLA that meet
accommodate provider’s user’s business requirements
business requirements • Factor in user’s rewards
• Factor in strong exit & penalty payment clause upon SLA
clause for provider upon fail fulfillment
to achieve SLA • Know how much resources
• SLA negotiation can refine the provider needs to commit
user’s understanding of its during service delivery
business processes • To extend SLA performance
• Agree on issues mgmt model down the hierachy to
protocol e.g. dispute its suppliers
resolution • Agree on issues mgmt
• Institute change mgmt protocol e.g. dispute
process resolution
• Institute change mgmt
process 8

9. SLA
Conference
Establish a Contract Team (cont’d)
Critical SLA Element - 5
Establish a User Provider
Contract Team
Motivator • Team of appropriate skills & • Team of appropriate skills &
from various disciplines from various disciplines
• Avoid using provider’s • Avoid using user’s
standard SLA contract which previous/existing SLA
may bias contract which may bias
Inhibitor Lack of commitments from • Lack of commitments from
mgmt mgmt
• Inflexibility of provider who is
too often locked into their
firm’s global system of doing
things & can’t adapt to user’s
customized service
requirements
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10. SLA
Conference
Prioritize Action Items
Critical SLA Element - 6
Prioritize Action User Provider
Items
Impact • Faster completion of SLA • Faster completion of SLA
development which bring development which bring
lower cost lower cost
• No missing out of key factors • Provides a target for provider
in SLA which brings better
quality service level fulfillment
Motivator Establish & implement a Establish & implement a
prioritization process prioritization process
Inhibitor Can’t decide which actions Can’t decide which actions
deserve high, medium & low deserve high, medium & low
priorities priorities
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11. SLA
Conference
Key Strategic Issues
Critical SLA Element - 7
Key Strategic User Provider
Issues
Impact • Specify key service levels • Identify critical success
• Facilitate negotiation on key factors & delivery service
strategic issues with provider accordingly
• Prompt to consider long term • Earlier assessment of
SLA requirement / provider’s delivery capabilities
implications • Complete coverage of user’s
key requirements
• Facilitate negotiation on key
strategic issues with user
• Consider future service
delivery implication
Motivator Pareto Law / 80:20 rule Pareto Law / 80:20 rule
Inhibitor No awareness or overlook of No awareness or overlook of
key strategic issues key strategic issues
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12. SLA
Conference
Meeting Geographical Differences
Critical SLA Element - 8
Meeting User Provider
Geographical
Differences
Impact Consider user’s individual Develop SLA meeting user’s
country SLA requirements individual country SLA
requirements
Motivator Localize SLA according to Localize SLA according to
different user’s country different user’s country
requirements requirements
Inhibitor • “one-size fits all” is not • “one-size fits all” is not
applicable applicable
• Not applicable for MNC if an • Not applicable for MNC if an
international standard SLA international standard SLA
enforced to all countries enforced to all countries
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13. SLA
Conference
Steering Committees
Critical SLA Element - 9
Steering User Provider
Committees
Impact Plan & decide best strategies • Plan & decide best strategies
to manage provider & to manage user & user’s
provider’s service levels service levels
• Prompt to conduct adequate
due diligence to verify
assumptions/previous records
Motivator User’s top mgmt involvement User’s top mgmt involvement
Inhibitor Lack of user’s top mgmt Lack of provider’s top mgmt
support/involvement support/involvement
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14. SLA
Conference
Selection of Account Manager
Critical SLA Element - 10
Selection of User Provider
Account
Manager
Impact • Single point of contact for • Single point of contact for
provider to approach user’s user to approach provider’s
organization organization
• Constantly review service • Monitor service level
level performance performance measurement &
user’s satisfaction
Motivator User’s top mgmt appointment Provider’s top mgmt
appointment
Inhibitor Lack of user’s top mgmt Lack of user’s top mgmt
support/involvement support/involvement
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15. SLA
Conference
A Sample SLA
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16. TOC of Service Agreement
SLA
Conference
1. Definitions 9. Intellectual Property
2. Scope of Agreement Indemnification
(incld. statement of work 10. Termination
& SLA) 11. Security
3. Service Warranty 12. Change Management
4. Health & Safety 13. Relationship of the Parties
5. Cooperation between 14. Public Statements
Provider & User 15. Confidentiality
6. Software Licensing & 16. General & Additional
Transfer Provisions
7. Prices, Terms of Payment
& Taxes
8. Remedies & Liability
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17. SLA
Conference
A Sample
Change Management Form
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18. SLA
Conference Some Useful Sites on SLA
Tutorial on SLA:
http://www.iec.org/online/tutorials/carrier_sla/
http://www.nextslm.org/
Services Level Agreement Management Handbook:
http://www.tmfcentral.com
Technicality on SLA:
http://www.nwfusion.com/research/sla.html
SLA Legal Perspective:
http://www.gtlaw.com.au
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