Johannesburg, 22 Nov 2006
Medium-sized businesses are increasingly seeking to outsource their information and communications technology (ICT) requirements to gain the benefits of improved performance and availability in a cost-effective way.
However, they are faced with some tough questions which need to be answered: exactly how should the first time outsourcer go about engaging with the selected managed services provider - and how can he or she be sure that the services promised in the sales pitch are provided as agreed?
According to Isaac Mophatlane, Business Connexion's Pretoria regional chief executive, the answers to these critical questions come down to a legal arrangement - the service level agreement (SLA). "The SLA is the yardstick against which the delivery of all agreed services is measured," he explains.
It is through the managed services contract that the service provider assumes risk previously borne by the in-house IT department. He says: "This is one of the key motivators for companies opting for outsourcing. Other benefits include improved service levels, wider expertise and better management of the ICT function."
Since the SLA plays such a critical role in governing service delivery, it is essential that the client fully understands the metrics, requirements, obligations and terminology of the document. Business Connexion's regional chief executive in the Eastern Cape, Gert Cronj'e, expands: "The SLA is pivotal. It is the rule book to which the service provider is beholden and may also contain penalty clauses which apply if agreed standards for service delivery are not met."
He notes that the metrics in a SLA must be clearly specified and understood by both the client and the service provider. "The creation of SLAs which accurately reflect the needs of each client is paramount," he says.
SLA metrics could include:
* The percentage of time the services will be available.
* The number of users that will be served simultaneously.
* Specific performance benchmarks against which actual performance will be compared.
* The schedule for advance notification of network changes, repairs or maintenance that may affect users.
* Help-desk response times for various types of problems or queries.
* 'Mean time to repair' for certain elements of infrastructure or services.
* Usage statistics.
While regionally focused, Phil Savides, regional chief executive of Business Connexion in the Western Cape, says his office nevertheless draws on the expertise and capabilities of its national infrastructure for best practice in developing SLAs.
He notes that while roles and responsibilities are outlined in a managed service contract, a good provider will always look for ways to improve both the services delivered to the client and the contract itself. "It's almost an unwritten rule, yet one which the service provider tends to focus on assiduously. By creating further value for the client, the relationship can only improve, so it's a natural progression," he adds.
Sydney Ramutla, regional chief executive of Business Connexion's Johannesburg region, notes that businesses in Johannesburg tend to be at the forefront of innovation in the use of ICT. As such, he says the concept of outsourcing non-core ICT requirements is relatively well accepted.
"However, companies choosing this option need to know that it will be a trouble-free exercise - and this is where the benefits of a properly thought out SLA come into play."
As client requirements are unique and there are many potential variables influencing a SLA, Ramutla advises that designing a suitable contract should be an inclusive and consultative process between the service provider and the client. The most important considerations include:
* Specification of service hours and scheduled service outages: Individual businesses may need unusually high levels of availability at certain times. It is important to outline when the ICT services are required.
* Specification of service levels for managed services or components thereof: Different levels of service may be required for different elements of an ICT infrastructure. Clients should understand the service levels agreed for each component and ensure these meet the company's business requirements.
* Reporting and measurement: The SLA must be supported by systems and tools to monitor system performance against the contract. The selected service provider should provide full access to this data, as required by the client.
* SLA breach penalties: Clearly defined penalties for non-performance against service guarantees.
* Value-add incentives.
Business Connexion's KwaZulu-Natal regional chief executive, Will Heygate, adds that a level of flexibility in the SLA will ensure that clients' needs are always met even if they change.
He says the choice of service provider will also play a critical part in ensuring all requirements of the SLA are accurately met. He points to recent research by BMI-TechKnowledge. The market intelligence organisation's IT Market Sizing and Forecast 2005-2010 report confirms Business Connexion's place as the leading technology services provider in South Africa.
"Dealing with an organisation with proven capability in itself provides a level of assurance that ICT managed services will be delivered in a way that benefits the business," he concludes.
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