How to Apply Service Level Indicators in Your Business for Better Outcomes

When a business is responsible for managing services, service level indicators (SLIs) stand as the cornerstone of measuring performance and maintaining quality. They are the foundation upon which service level objectives (SLOs) and service level agreements (SLAs) are built, delineating what to measure, how to measure it, and the consequences of falling short. But how do you effectively implement SLIs in your business? In this article, we’ll explore important factors and viewpoints to consider, and how to design SLIs and align them with your business.

In some businesses, IT can easily become an order-taking function, implementing isolated solutions without considering their role in the larger business strategy. Instead of simply filling requests, IT should ask how each solution fits into the service architecture for achieving the overarching business goal. SLIs should be viewed as attributes of individual puzzle pieces rather than the full picture, helping leadership better understand how technology contributes to business success.

SLIs essentially pinpoint the critical metrics to monitor key attributes of a service such as system–response time, throughput, and error rate. When applying the SLI concept, consider the following factors:

• Business Perspective vs. IT Perspective: It’s essential to consider both views as they are necessary for a comprehensive approach.
• Service Level Management: This involves aligning expectations with actual capabilities to ensure clarity and satisfaction.
• Capabilities and Services: Design services that cater to both functional and operational needs.
• Constraints: Take into account limitations such as budget, available skills and other relevant factors.

While IT must manage SLIs, they must also understand and manage service levels from the business perspective. Often, a business’s capabilities depend on orchestrating multiple IT technology services. IT’s ability to establish and manage meaningful business SLIs for at least the key business capabilities is essential to aligning technology with the business strategy. Business SLIs directly influence and contribute to business outcomes such as operational volume and efficiency, operational costs and speed to market.

SLIs are only meaningful when achieved within the existing environment. Setting SLI targets based solely on stakeholder expectations can lead to business dissatisfaction and frustration. Dissatisfaction stems from a misalignment of expectations and IT’s actual capabilities, increasing missed service level targets. When you don’t set up business and IT for success in achieving their targets, frustration is likely to occur.

Designing for functional needs is a baseline expectation. Most IT organizations excel at solving business functional needs. A key caution and recommendation to consider is stepping back and reviewing your business’s functional needs in the context of the entire business process and technology portfolio. In other words, take a broader perspective. Technology teams often take a micro-view of business functional needs, which may lead to excessive technology spending and unnecessary complexity of business services.

Designing for a business service’s operational needs is often more challenging due to multiple factors such as:

• The business understanding of the value impact. For example, what is the business value of a service availability SLI of 99.9% vs. 99.99%.
• The complexities of operations and support are designed for the cohesive integration of people, processes and technology. Examples include monitoring framework, service delivery chain insight provided by configuration management, and IT service management processes.
• The shared nature of the operations and support capabilities possibly contributes to an operational framework misaligned with the service level expectations, requiring additional, unexpected investment.

Any service level is attainable with unlimited resources. The challenging question most businesses ask is: How do we design and operate within constraints? A primary constraint is cost, both from a development and an operational delivery and support perspective. IT’s ability to manage the budget by business expectations (e.g., the percentage distribution of IT budget on delivering new or modified capabilities vs. operational support) is key. Another common constraint is skills; for example, adopting a public cloud as a hosting platform requires the ability to manage the selected cloud platform.

In summary, when establishing and applying your SLI targets, apply the business to demonstrate and drive value, and consider your current and designed state as well as constraints to ensure the targets are attainable. In addition, ensure your operational and support processes provide visibility and transparency into the service level performance. These actions will set you and your business up for success.