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Blog posted by: David Cannon – Executive Vice President, nfiniti3 and member of ITIL Practices 2023 revision team: Service Level Management, 01 December 2023.

In the absence of service level management, what tends to happen to a service provider and their consumer?

And what can service management practitioners gain from the latest update to the ITIL 4: Service Level Management Practice?

Without an agreed level of service, what tends to be provided is “best effort”. The problem is this creates an expectation based on a previous “highest level” of service, which was probably an exception rather than the everyday standard of delivery.

Therefore, this is more likely to disappoint customers even when doing your best.

Simultaneously, service providers will set service standards by what and how they’re being paid. The potential risk here is two-fold: companies could be paying for a level of service that’s not required or expect something the provider can’t afford to deliver.

The SLA today

Those that turn service level agreements (SLAs) into something adversarial – essentially, negotiating the best possible deal but with punitive clauses – are creating the kind of relationship you don’t want.

Conversely, the SLA today, when done well, reflects the nature and spirit of the working relationship. For example, in some situations, the SLA is a document which – while not a contract – outlines the preferred ways of working; a simple statement supported by a healthy relationship.

Organizations that do this well understand their objectives: in short, to help the company be successful. And service level management helps to find common ground between provider and consumer. When both are working for the same organization, the SLA articulates how they collaborate to achieve the same overarching business objectives. Where service providers are external, the SLA helps align the desired, mutual value.

Where things can become difficult is a hangover from when SLAs used between an organization’s internal teams were adopted by large service providers, which included SLAs in an appendix to their contracts. Today, there is still confusion caused by this and context is essential: for example, is the approach about managing the service level from an external provider, between internal partners or teams in the same department?

This is why broader knowledge and expertise in service-level management is essential.

ITIL 4: Service Level Management Practice – utility, warranty, and experience

The update to ITIL 4’s Service Level Management practice defines the context of the service level agreement, whatever that context may be.

And this recognizes the need to set expectations. In practical terms, this means asking:

• As an IT provider what level of service do I provide? Understanding the level of expectation is key to delivering satisfaction while not setting the level as “utmost”.
• What is the range of optimal service delivery? This means sometimes providing a little more to ensure customer loyalty (e.g. when, in a restaurant, a side dish appears unexpectedly as a taster).
• How far below the agreed service level is tolerable? A fall of 5% might not be intolerable, but you must rectify it quickly and turn a negative into a positive. Equally, going 5-10% above the agreed level is acceptable but not more: it’s unsustainable and people get suspicious (because it’s too good to be true).

What the updated ITIL 4 practice also does is tackle the sticky issue of experience level management, by asking the recipient what will make them feel good when using a service and translating it into something controllable. Therefore, the SLA must address:

• What does the service do?
• Does it perform how it’s supposed to?
• What is the experience when used?

All three measure whether the SLA is achieving the outcomes of utility, warranty and experience.

In addition, a new element in the practice is showing how to use the ITIL Maturity Model to measure and to improve the capability of your practice.

The most important factor in service level management is understanding what your customer is trying to achieve. This will help ensure you have the right levels of service defined and agreed and provide the appropriate and relevant level of service to meet them.

Ultimately, be realistic: set your level of service at what you can deliver today and continue to improve in your response to customer needs over time.