I-Day Special: Break Free from the Tyranny of SLAs

What does a perfect Service Level Agreement look like? Your service provider promised you that magical ‘five 9s’, but does it really ensure that you get a trouble-free service? Unfortunately, an increasing number of CIOs might confess that their woes with tricky SLAs are never-ending.

Irrespective of all the effort and care that you put in, a ‘.001 percent’ possibility of a downtime some time falls on the most critical day of the year, costing millions to your business.

Simple, realistic, transparent, and time-bound on paper, but CIOs can still get burnt by their providers’ SLAs for totally unexpected reasons. How do you get freedom from the trap hidden in an SLA? On Independence Day, we decided to ask three CIOs about how they wrestle with the SLA-related conundrums.

Vijay Sethi, VP & CIO, Hero MotoCorp: Go Beyond What’s Written in SLAs

Vijay Sethi does not call his service provider a vendor. He instead prefers to treat them like a ‘partner’. It’s not just a matter of ‘choice of words’ for Sethi. In the last few years, he has been consciously working toward building a stronger relationship with his providers, rather than keeping it transactional.

Sethi believes that simply penalizing the service provider who could not meet an SLA is not the way forward and it might even backfire on you.

“The ultimate objective of an SLA is to provide better service to the end users. If I start nitpicking even the smallest flaws in my service provider, I will be channelizing my energy towards negative things,” Sethi says.

At the same time, he spends a lot of time with his ‘partners’ in understanding and diagnosing the root cause of a problem or a downtime; redrafting the SLA if required and motivating the partners to do better next time. While he certainly makes them pay a penalty so that they don’t take things lightly, referring to contract document all the time is a big ‘no’ for Sethi.

“We do draft SLAs, but we go beyond SLAs to create partnerships. All our SLAs are joint SLAs,” he adds. Sethi says his service providers are treated like his own team members. It is no wonder that all his review sessions with the service providers are mostly coffee meetings!

Naresh Kumar Pathak, Head-IT, Sentiss Pharma: The Business-driven SLA

At Sentiss Pharma, business runs on a 24×7 basis. And mostly importantly, business has huge dependency on IT.  The IT department thus is the key service provider for the business at Sentiss. If there is any deviation in SLA, it directly impacts productivity and business outcome. Naresh Kumar Pathak has to be literally on his toes to ensure that SLAs are met, because he is answerable for even the smallest business loss. He had to doubly ensure that the clauses in the SLAs are in tune with business requirements, and not just that of the IT department. Pathak’s full-grown strategy on SLAs between IT and end-users is thus probably one of the best examples for how a good SLA can be drafted.

“The first thing we did was to form a steering committee, which included all business unit heads. Drafted SLA will be shared with steering committee and we amend the SLA based on the inputs given by steering committee,” says Pathak.

Pathak’s job doesn’t end there. The escalation matrix and job responsibility are shared among end users on a quarterly basis, so that new employees are aware about IT support structure and they don’t land up in any kind of confusion. This ensures that each employee at Sentiss knows who does what and what service level is guaranteed from IT.

“We share support performance with steering committee on quarterly basis showing SLA adherence, the number of calls received, on-time closure, and even response delay if any with proper reason,” says Pathak.

With transparency and business involvement, Pathak has been able to achieve SLA targets and avoid any panic or conflict with end-user departments.

Sankaranarayanan Raghavan, Director-IT, Aegon Religare Life Insurance: Be All Ears

The biggest tragedy that can happen to an SLA is perhaps the inexperience of the parties who write that SLA. Most people, whether it’s the vendor or the IT leader, do not know what exactly should go into an SLA.

The result—unrealistic demands and false promises, leading to downtime and productivity loss. While vendors might try to impress you by going beyond the five 9s to offer 100 percent uptime, it’s the CIOs who need to do a bit of an introspection.

Sankaranarayanan Raghavan, director-IT at Aegon Religare Life Insurance believes that it’s very important to listen to the service provider first. “Instead of imposing an SLA, ask the service provider what they can commit. Once they commit, we go about adding an incentive for meeting the SLA we wanted them to achieve. There of course will be a penalty clause if they don’t meet the desired SLA. But the most important thing is to be realistic,” he says.

Raghavan says that a breach or the failure to meet certain demands are almost always unintentional. No vendor would do that purposefully. “The failures are usually because they had some constraints, otherwise they would have met our demands,” Raghavan adds.

And that is the reason he ensures that the communication thread between the two parties are not broken. He conducts regular meetings on understanding the constraints and work with the service provider to find a solution. Discussions also help him in articulating the business requirements in a much better way.

“Appreciation of their work is very important. This gives an impression that their service is valued, which in turn results in better service for the end users,” says Raghavan.