In this era of outsourcing, many organizations have realized significant cost reductions from disaster recovery (DR) infrastructure outsourcing. Often, this goal has been achieved at the expense of the organization’s strategic objectives. This is unacceptable. For true accountability in vendor-client relationships, in order to ensure cost as well as strategic benefits, robust service level agreements (SLAs) are essential.
SLAs focus on measuring and managing productivity and service quality improvement for IT outsourcing are key to determining the true value of an outsourcing engagement. SLAs validate expectations of the respective parties, and set parameters for measuring project success. An ideal SLA template measures the status of an outsourcing project, and empirically scores the vendor’s performance using measurable and enforceable results.
As SLAs become an important part of the vendor selection process, organizations will want to ensure that they are working with an experienced vendor that knows how to construct an SLA that serves the customer’s best interests. In this tip, we explain best practices for structuring, implementing and successfully managing SLAs when outsourcing work to a hosted DR vendor. You can download the SLA template here.
The factors to consider while finalizing the SLA in an outsourcing engagement are as follows:
- Clear goal definition
The team responsible for managing the outsourcing deal must deliberate and decide on the driving factors of this engagement. A clear consensus on the desired goals of the DR outsourcing engagement should be arrived at and documented unambiguously. A shared vision along with an understanding of who is empowered to make things happen is crucial to success. Having decided what is required and how it will be measured, the next step is to develop agreements and contracts that capture these components and are structured to evolve to meet dynamic business requirements. Experienced outsourcing vendors will leverage past account work to optimize the process. Our downloadable SLA template can be used to validate this process.
- Focus on quality of service
The main focus should be on the quality of service being offered by the vendor, rather than only on the cost benefits.
- SLA metrics
Detailed discussions with the vendor should be carried out to define the SLA metrics for measurement, such as recovery time objective (RTO) and recovery point objective (RPO). With ill-defined metrics, the organization will find it almost impossible to measure changes or consistency in service levels.
- Flexible approach
A change in culture is necessary for successful outsourcing arrangements. For instance, many organizations evaluate their operational effectiveness by evaluating the person performing a task; with outsourcing, organizations must shift this assessment to consider what is being done, how it is being done, and how effectively it is being done.
- RACI matrix approach
The RACI -- Responsible, Accountable, Consulted and Informed -- matrix should be prepared for service provider as well as service recipient, for a successful engagement.
Structuring an SLA
Structuring an SLA is an important, multiple-step process involving both the client and the vendor. The downloadable SLA template can be used to facilitate this process. An assessment should be conducted with help of the various application owners for which the DR hosting solution is considered. The following steps should be performed and documented:
- Collect information related to various application RTO and RPO requirements.
- Analyze the data.
- Conduct interviews with appropriate IT resources to clarify issues and understand applications and projects.
- Decide frequency of risk assessment and business impact analysis (BIA) for each business unit.
- Decide frequency of tabletop exercise for each BC/DR plan.
- Submit recommendations to IT management for approval and discussion with the outsourcing vendor.
Once IT and business objectives have been identified and agreed upon, the IT staff or outsourcing vendor should collect baseline performance metrics for the applications that will be outsourced, as outlined in the SLA template.
Once the SLA template has received buy-in from all involved parties (including legal, finance and delivery teams), the format, structure, and frequency of reporting is determined. The vendor will then recommend tools and methods for automating data capture and reporting. There should be an established “score card” reporting format and a regular process to review it.
SLA agreements require constant discussion and renegotiation as the needs of the business change. In addition to simple and automated measurement techniques, SLA management processes must be in place to ensure clear communication between the parties involved. Successfully addressing service level challenges can be accomplished by leveraging the following:
- Clearly defined responsibilities of vendor and client employees
- Named executives and management participants
- Defined and measurable commitments
- Escalation procedures
- Project management
- Program management (contract impacts)
- Regular and scheduled communication
Once the project is started, as stipulated in the SLA template, monthly status reviews and quarterly staff-planning meetings are recommended between the client and vendor to review the engagement status and determine proper staffing levels and mix for the subsequent quarters. Throughout this phase, make sure the SLA outsourcing vendor commits to perform the following:
- Execute the workload priorities established by the client
- Identify opportunities to improve the client’s business
- Collect and report service level metrics
- Set additional productivity and quality goals based on metrics reporting
- Report completed activities and planned activities to the business and user groups
|Areas||Examples of metrics|
|Project initiation and management||
Program management process in place.
Qualified program team to manage the program.
Policies and procedures approved.
Risk analysis and management
Risk assessment process.
Periodic risk analyses conducted.
Risk treatment process established.
Business impact analysis
Identify key relationships and dependencies with internal and external organizations.
Identify financial implications of a disruptive incident.
Identify RTOs and RPOs for critical functions.
|Data recovery||Number of recoveries performed and time taken for each recovery.|
|Server recovery||Time taken to restore the server along with OS and applications.|
Most of the DR hosting vendors have their own service level agreement template. Attached is a downloadable SLA template for an outsourced DR solution. You can use this SLA template to compare with the vendor’s SLA template and request any amendments if necessary.
About the author: Anuj Sharma is an EMC Certified and NetApp accredited professional. Sharma has experience in handling implementation projects related to SAN, NAS and BURA. He also has to his credit several research papers published globally on SAN and BURA technologies.
This was first published in August 2011