6SLM functions and processes

Although we initiated discussion of the design activities within the previous chapter (dealing with the service structure document), in actual fact the design of the process begins with the definitions of the processes and functions that are under the responsibility of service level management (SLM).

This chapter details the scope of SLM by laying out its processes and functions. We appreciate that organizations may define the scope of the process differently; however, this publication provides you with best practice, and also provides a model for you to strive for – an ideal SLM process.

6.1SERVICE LEVEL MANAGEMENT – A HIGH-LEVEL PROCESS

The SLM process requires a high level of coordination and control. The process involves many different types of activity, which might create a complex and difficult environment to design, let alone to manage. Our process is responsible for tracking and reporting on the quality of the services, keeping a close business relationship with the customer, tracking the costs of services, and improving overall performance. Those activities are the ongoing tasks that are directly related to the services. Let’s not forget also that SLM defines documents, and negotiates and agrees on the quality of services.

ITIL defines processes and functions that fall into the different lifecycle phases. SLM is a process within the service design lifecycle phase. In many organizations SLM possesses the elements of a function as it is a structured department owning its resources. This department operates under different names: SLM, customer relationship management, global service quality management, and others.

Section 6.2 defines the three areas of focus that make up the SLM function. These areas will be the basis for our design and will provide the framework to guide us through the development of the sub-processes, roles and responsibilities. Section 6.3 considers an integrated SLM function based on five sub-processes, as illustrated in Figure 6.3.

6.2SERVICE LEVEL MANAGEMENT – FUNCTIONAL AREAS

The SLM function, led by the service level manager, is responsible for carrying out the activities of the SLM process. The service level manager coordinates between the functional areas of focus and the various team members to ensure that all areas are striving towards the same goal.

Three important roles are defined for SLM: service level manager, reporting analyst and service relationship manager. Each requires different skill sets that will need to be coordinated and managed by the service level manager. The three functional areas associated with these roles (and described in the following sections) are:

• Service level management operations The service level manager, as the owner of the service level agreement (SLA), leads the service review meetings and initiates service improvement tasks. The service level manager is responsible for coordinating the other two functional areas (below), and for staff training and quality control.
• Service reporting This functional area (performed primarily by a reporting analyst) provides reporting support to all service-related activities, and it includes the ownership of the report catalogue, communicating with data owners and preparing reports.
• Service relationship management (SRM) This functional area is responsible for developing the relationship with the customer and the service provider. SRM’s main focus is on the service review meetings and the service improvement plan (SIP) process.

The service relationship manager and the reporting analyst are cast from different moulds. The service relationship manager’s goal is to ensure a high level of customer satisfaction, aiming to manage customer perception by utilizing interpersonal skills and resourcefulness. The goal of the reporting analyst is to provide accurate and useful data that are presented in clear and structured reports. The reporting analyst is likely to be very analytical in their actions and will spend most of their time on data mining and report generation.

The service level manager has their work cut out. Apart from coordinating and monitoring the activities of the service relationship manager and the reporting analyst, the service level manager will need to reconcile the different priorities of their discipline.

Figure 6.1 Service level management operations

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In some organizations the service level manager will fulfil all three roles, i.e. including those of the reporting analyst and the service relationship manager. The size of the organization and the scope of the responsibility of the SLM process will determine the SLM structure.

6.2.1Service level management operations

The service level manager is directly responsible for the operations of the function, as shown in Figure 6.1. First and foremost this function is responsible for the execution of the SLM process activities, monitoring their effectiveness, and improving them when necessary. The process operation activities include stakeholder management and risk management, which are discussed in Chapter 19.

SLM operations is accountable for the overall health of the process and utilizes the ITIL lifecycle approach to categorize its areas of responsibility, which are set out below.

6.2.1.1Process strategy

The service level manager will constantly reiterate and refine the related critical success factors (CSFs) to ensure that the SLM process is meeting the objectives of the organization.

The service level manager is also the focal point and the contact person who communicates with stakeholders to determine whether any changes have occurred in the overall strategy of the organization and to further determine whether these changes may impact the SLM process.

6.2.1.2Process design

SLM operations is accountable for the ongoing business value and integrity of the process design across the functional and organizational boundaries. The design activities relate to:

• Processes, policies and procedures
• Process roles and responsibilities
• Key performance indicators (KPIs).

SLM operations will also ensure that, as part of the design process, integration is planned with external processes and functions such as incident management and the service desk.

6.2.1.3Process implementation and transition

The service level manager will own, assure and approve the transition of the SLM service design into the live environment, as well as the implementation of its activities, processes and the recruiting of its personnel.

SLM operations is responsible for the implementation of tools to support the various process activities. The service level manager will lead the design of the SLA compliance reports and SIP.

6.2.1.4Process execution and coordination

SLM operations is accountable for the execution of process activities. SLM operations is also responsible for measuring and reporting on process compliance across organizational silos.

The service level manager will also lead the following activities:

• Advocacy, representing the process and dealing with political issues
• Promoting a culture of process collaboration and integration
• Breaking down strong silo or functional mindsets
• Managing process exceptions
• Coordination between the functional areas of SLM
• Conflict resolution.

6.2.1.5Continual process improvement

There are two categories for process improvements: reactive activities, which resolve local failures; and proactive activities that attempt to eliminate future failures. Below are some typical proactive activities that are carried out at regular intervals:

• Internal and external training
• New employee orientation
• Teambuilding exercises
• KPIs review
• Documentation review
• SLA audits.

6.2.2Service reporting

Service reporting is responsible for producing and delivering reports of achievement and trends against service levels. Service reporting should agree on the format, content and frequency of reports with the customer. Bear in mind that these reporting activities will evolve as your customer’s requirements and business requirements are refined or changed.

Traditionally, SLM was just a reporting process, responsible for tracking SLA results through monitoring and reporting. In today’s practice, SLM’s scope has expanded to also cover managing the relationship with the customer, negotiating terms and agreements, and tracking customer satisfaction. The reporting analyst’s activities of data mining, report development and populations seem more of a constant burden or a necessary evil for the service level manager. Therefore, when designing the process, make sure you define the function of service reporting and when possible allocate a separate resource for this role.

6.2.2.1Service review reports

Service reporting’s first priority is to prepare reports for the service review meetings, and to provide the reports in a timely and professional manner with accurate and meaningful data. The final reports should be approved by the service level manager. At the discretion of the service level manager, the reporting analyst may also be tasked with the presentation of the reports during the review meetings.

During a service review meeting, the service relationship manager and the customer may agree to modify the SLA compliance report results. In this case, service reporting is responsible for amending the reports and for generating a new and final report.

6.2.2.2Data integrity and correct calculations

Some of the report information might be incorrect for various reasons:

• Corrupted data
• Wrong calculations
• Incorrect entries by operational staff.

Automation of the reporting process aims to eliminate the above issues, and the organization should strive to design its systems towards maximum automation of data flow. However, not all organizations own automated reporting systems and instead use the services of a reporting analyst as described above.

6.2.2.3Report catalogue owner

The report catalogue maintains a list of reports and their definitions that have been discussed, analysed and agreed with the customer and the service provider. The reporting analyst will manage the report catalogue and ensure not only that it continually meets the changing needs of the business, but also that the reports that are developed reflect the specification of the catalogue. Much like the SLA, the reporting requirements must be negotiated between the parties and should include both scope and cost considerations.

6.2.2.4Reporting solution contact person

Many organizations deploy a reporting software solution or an external reporting function, the sole responsibility of which is to generate performance reports. In this scenario, the SLM service reporting function will represent the reporting requirements of the process and will act as a liaison and as the main stakeholder interfacing with the external reporting function.

For a more detailed description of service reporting, refer to Chapter 15.

6.2.3Service relationship management

In today’s market the most efficient way to retain profitability is through customer loyalty and retention. The smarter companies now concentrate their attention on the most valuable customers and spend fewer resources on attracting new customers. To retain your customers you have to know them intimately, know what makes them happy and what their underlying business needs are. Service relationship management provides that role while working with the customer, building relationships with them and gaining their loyalty.

The service relationship manager is the everyday interface with the customer, including regular meetings to review service performance and/or assist with critical events and incidents. SRM will always be involved in any critical incidents that have a high impact on the customer. In such cases, the service relationship manager will participate in the incident management process and consistently communicate with the customer, providing the status of the incidents.

In a small organization with SLM, where the service level manager takes the role of the service relationship manager, this role becomes the focus of the service level manager’s activities. In a larger-scale organization – specifically where the customer resides in different geographical locations – service relationship management is structured accordingly. In this case the global service relationship manager will interface with the service level manager and will coordinate the different service relationship managers per region (see Figure 6.2).

The structure of service relationship management can also be determined by the structure of the SLA. For example, if the SLA is categorized by services, we might want to designate a service relationship manager for each service. If different cultures and languages have a significant impact on service provision, we will allocate a service relationship manager on a regional basis.

For a detailed description of service relationship management, refer to Chapter 18.

Figure 6.2 Service level management – function structure

6.2.3.1Service review meeting and service improvement plan

Service review meetings are the pinnacle of service relationship management work. If the service review occurs on a weekly basis, the service relationship manager will prepare for the meeting throughout the week. The primary communication tool in SRM is the continual service improvement (CSI) register. The SRM functional area regularly updates the CSI register with new records or modifies existing records. This allows the service relationship manager to communicate efficiently with both the customer and the service provider.

6.2.3.2Critical incidents

As part of the incident management process, the service relationship manager may be defined as one of the escalation levels in a hierarchical approach known as management escalation. The types of event causing such escalation are often referred to as major incidents, critical incidents or ‘Severity 1 or 2’ incidents, and they are generally those that are highly visible to the customer when they occur.

The role of the service relationship manager in these cases is to interface with the customer throughout the lifecycle of the incident. The service relationship manager will provide status updates of the incident at regular intervals and will be available for the customer to call and discuss issues relevant to the incident.

Good practice in SRM is to define a root cause analysis (RCA) procedure as part of the critical incident process. In this case, after the incident has been resolved, the service relationship manager will review the documented RCA of the incident with the customer. The result of this discussion may initiate a SIP.

6.3OVERALL INTEGRATED SLM PROCESS

To execute the process effectively, the three different functions must come together: SLM operations, service reporting and service relationship management. The structure of the function and the definition of the roles and responsibilities will depend on the amount of resources allocated for the process.

The three basic roles defined in the previous section are:

• Service level manager
• Reporting analyst
• Service relationship manager.

As part of the process implementation, as service level manager you will need to assign activities for each role and find the integration points between those activities. The result of this design will be an overall integrated SLM process, a primary input into process modelling, or any detailed design of the processes and procedures.

The design of the operational SLM process starts with the development and management of the SLA. The SLA is supported by three operational activities: monitoring and reporting, service review and SIPs.

In reality, SLA management is not considered to be an ongoing operational activity. The SLA is signed off and is not expected to be modified until its next audit – contrasting with the above three operational processes, which are ongoing cyclical activities that focus on daily service provision.

Continual process improvement is, as illustrated in Figure 6.3, a background process that is performed either at intervals or when triggered by an event. This process governs all the activities of the process and ensures their effectiveness.

6.3.1SLA management

The SLA management sub-process focuses on the agreement itself and its conditions. The goal of this process is to define an agreement between the customer and the service provider, where the agreement will define the services and the quality of their provision.

Figure 6.3 Service level management process

The service level objectives (SLOs) defined in the SLA will be monitored and reported on. The process is subject to constant review; and such a review, regarding SLA structure and content, can be instigated by one or more of the following conditions:

• End-of-service pilot SLA period ends This period is normally the first period defined for the services to be provided against an initial SLA, and the SLA will generally be reviewed thereafter.
• SLA audit As good practice, an audit of the SLA will typically be performed on an annual basis. This exercise will most likely result in a list of suggested actions, one of which might be to make modifications to the SLA.
• Service review As a result of a service review, the customer or the service level manager may raise a request for change (RFC) in order to modify the SLA. For example, the customer might suggest lowering the cost of services in exchange for lowering service level compliance.

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It is not uncommon for the service level manager to suggest lowering the service level compliance threshold in certain circumstances. The service level manager might present the customer with scenarios where the service levels are not achievable and yet the performance of the service provided is sufficient for the business. This type of discussion can only take place in a positive environment where the service relationship manager builds a relationship with the customer that is based on mutual respect and mutual interest.

6.3.2Monitoring and reporting service quality

Monitoring and reporting service quality is based directly and strictly on the conditions defined in the SLA. This activity is one of the three ongoing activities of the SLM process; the other two are the service review and SIP. The three activities are essentially integrated and coordinated throughout the SLA review period (typically a month). SLM reports on the SLA are presented and reviewed in the service review meeting. The service review meetings result in items to be improved that are processed through the SIP.

The monitoring and reporting sub-process is responsible for collecting data and generating calculations and reports to enable a review of service performance to take place constructively. The monitoring and reporting function owns the report catalogue and is a primary actor in defining the metrics and measurements under review.

6.3.3Service review

The service review meeting is not just another regular meeting that is placed on the customer’s and the service level manager’s calendar. Service review meetings are essential to the process and are the main instruments used to build the relationship with the customer, review SLA results and follow up CSI register records related to degraded or disrupted services. There are specific inputs and outputs for the service review sub-process, along with a structured agenda to the meeting, and it cannot be stressed enough how important it is to design the sub-process as effectively and productively as possible.

6.3.4Service improvement plan

The SIP process is designed for the service level manager to effectively use the CSI register to convey to the customer what is being completed regarding degraded or disrupted services. The CSI register is also used to communicate to the service provider the customer’s expectations and prioritization of action items.

6.3.5Continual process improvement

All aspects of SLM are subject to process improvement. Process improvements are not only performed at regular intervals; in fact, they can be triggered reactively by operational events or as a result of proactive measures. The improvement activities are considered to be a background process that is aimed at ensuring the effectiveness of the SLM process. Indeed, a high-level approach to continual process improvement – which is seen as part of the overall SLM process – should be taken into account in the early stages of SLM service design. Greater detail regarding continual process improvement for SLM is given in Chapter 20.

6.4SUMMARY

This chapter illustrates the high-level design of SLM. This structure is a direct result of the process strategy and its objectives.

The design of the process is made up of two major elements: areas of focus, and processes. We learned that SLM includes three areas of focus and five processes (if you include continual process improvement as a background process).

Table 6.1 presents the SLM sub-processes in a RACI (responsible, accountable, consulted and informed) format. The table links the areas of focus and the processes, and sets out the basis for the detailed design ahead of us.

Table 6.1 SLM sub-processes presented in a RACI format

Note: R = responsible for delivering the action; A = accountable for the action; C = consulted before the action; I = informed after the action.