What is service level management and why is it important?

By Indeed Editorial Team

Published 8 July 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Service level management (SLM) is one of the most important elements of Information Technology Infrastructure Library (ITIL) service delivery. The end goal of SLM is to ensure that business IT infrastructure delivers the precise results that the business requires at any given time. Understanding how SLM and the ITIL work can help you maintain alignment between business goals and the supporting IT services, meaning if the former change, so do the latter. In this article, we define SLM, explain why it's important and offer advice on how to implement ITIL service level management in an organisation.

What is service level management?

Service level management is a framework that businesses use to define services and agree upon the service levels required to maintain business processes. They then determine how much these services cost and produce service level agreements (SLAs) and operational level agreements (OLAs) to serve as confirmations. In layman's terms, SLM enables IT departments to deliver the right kinds of services that their organisations require in a way that's both accurate and cost-effective. This can empower business units because it ensures the right kinds of IT services and support systems are available whenever they require them.

Here are some of the activities that service level managers perform:

liaising with business units to identify business requirements
producing and maintaining service catalogues that detail the costs of services
determining the scope of services
establishing operating hours, service performance and recovery aspects
deriving IT requirements from business requirements
determining what's required to close gaps between business requirements and available IT services
working out how to satisfy the requirements of businesses while remaining within pre-defined budgetary limits
negotiating, producing and adjusting SLAs with business units, ensuring all parties agree and that the SLA meets business requirements
adjusting SLAs as necessary according to changing circumstances
measuring SLA performance and reporting results

Importance of implementing SLM

Here are some of the major benefits of implementing SLM:

Improved communication

SLM enables improved communication and increased transparency between business units and IT departments. This means that IT professionals can better understand the needs of business units and provide more effective solutions. Having a framework that fosters constant communication also enables IT teams to monitor, review and improve service performance. This produces a superior level of IT service for a business and allows the business to operate more effectively overall because business units can clearly state service quality expectations.

Increased business agility

Business agility refers to how an SLM keeps a business agile in terms of its ability to quickly pivot in a new direction based on changing circumstances. SLMs collect information about business infrastructure so IT departments can see trends and adapt to them accordingly. This also means businesses can more easily adapt to new marketing initiatives or the introduction of new services.

Provision of customer focus

Businesses seek to deliver the best outcomes for customers. Because SLM systems help IT departments offer the right services to businesses, they can deliver better outcomes to customers in turn. SLM helps to create a customer-centric focus throughout the entire business and its processes.

Improved efficiency

Through SLM, IT departments can deliver the exact level of service the business requires, meaning it can reduce wastage and save money. By enabling a clear understanding of what the business requires, the IT department can scale or reduce the level of service based on the precise needs of the business. This avoids wasting money on excess IT services and infrastructure and eliminates the risk of not having the right services available when the organisation needs them.

Key elements of SLM

Here are the key elements for professionals to be aware of if they're to understand the programme and implement it successfully:

Service level agreement

This is an agreement between an IT service provider and a customer. This document outlines the responsibilities of each party, describes the IT service in question and documents the service-level targets. Businesses often use one document to cover multiple services and customers.

Service level requirement

This document helps to conduct the negotiation of SLAs. It defines what the customer requires from IT services based on business objectives. The primary goal of this document is to define customer expectations, which helps to produce key performance indicators in turn.

Service level agreement framework

There are multiple options available when designing SLAs. The first is a service-based SLA, which describes the specific IT service that the customer wants and expects the IT team to deliver. The second is a customer-based SLA, and this describes the IT services that the IT team is to deliver to a specific customer. Finally, multi-level SLAs are SLAs that inherit the terms of each previous SLA, making ongoing maintenance more manageable.

How to implement SLM

Here's an outline of how you can implement SLM within an organisation:

1. Collect data

The first step towards implementing SLM is to designate an SLM leader and create a team. The team then carries out the following duties to collect the relevant data:

evaluating the current condition of the software the company is using and the inventory tools
gathering the details of the capacity management budget
conducting a gap analysis to work out the areas requiring improvement
designing a project plan

The team leader can then share this plan with the relevant business units to ensure they agree on the plan before moving forwards.

2. Building the project plan

The following are elements to include in the project plan:

determining the people, tools and processes that the project requires
preparing and creating a budget by outlining the costs of sustaining the new organisation
deciding where to place the service level manager within the organisation
detailing the specific workflows, including data inputs, work processes and information outputs
setting aside enough time to train the people responsible for the work
determining if the project requires any work to acquire and consolidate any capacity and performance tools

It's important to ask the relevant departments to review this expanded business plan and the budget, then you can send it for approval.

3. Execute the project plan

You can follow these steps to execute the plan:

Assign staff members.
Document the process.
Acquire and implement the necessary tools.
Create a service catalogue, including the important financial details.
Produce SLAs and OLAs by identifying, developing and negotiating them.
Define metrics and KPIs based on the business's definitions of value.
Identify any services the business requires that IT isn't currently making available.
Build training materials and deliver training programmes.
Establish the reporting the processes, including high-level reporting and problem reporting.

4. Start the ongoing SLM work

It's important to include the ability to automatically inform the SLM team when:

Sudden bottlenecks result in the risk of the service missing its performance targets.
Sudden surges in demand threaten to prevent services from meeting performance targets.
It's time for the business units to perform reviews based on the pre-defined targets.

Professional managers document all of the lessons that the team learns throughout the process so that they can improve future migrations and implement any necessary changes.

Items to include in SLAs and OLAs

These are the elements to include in SLAs and OLAs:

all parties involved
start, end and review dates
scope of the agreement
description of the services provided
roles and responsibilities of each party involved
operating hours
service availability
service reliability
support
throughput, transaction times and/or response times
change turnaround targets
security requirements and considerations
service continuity
service costs and how the company charges them
service reporting
service incentives and penalties

Risks of implementing SLM

While implementing SLM has many benefits, it's also associated with risk. The company mitigates these to avoid an unsuccessful implementation. You can mitigate them with proper attention and planning, so it's important to spend adequate time in the planning stage. These risks include:

identifying incorrect people and involving them in the client base when creating SLAs and making agreements
selecting incorrect services if a business is new to SLM procedures
parties disagreeing on SLAs
lack of quality input and dedication from the business
lack of the required resources and tools that the SLM requires to initiate and maintain the process
Challenges in identifying correct KPIs and targets
improperly documenting procedures and omitting key information