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Disconnect results in failed SLAs

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Business expects more than IT is able to deliver, resulting in SLAs (service level agreements) not being met more than one-quarter of the time.

A study commissioned by Compuware and conducted by Forrester Consulting shows that while 81% of organisations have adopted formal service level agreements (SLAs), they only meet these agreements 74% of the time on average. Many companies also report that poor application performance results in increased costs and lost revenue.
In the study, Forrester Consulting concludes that the primary reason for missing SLAs is that the business unit has expectations out of the reach of IT.
A key reason given for this mismatch in expectations is the use of service level metrics that are IT-centric and are not compatible with business objectives. The Forrester study found that 41% of respondents agreed that their insight into service levels is basic and that they don’t provide SLA information to executives on a regular basis. In addition, 40% of those surveyed agreed that their service level reporting lacks information that their executives have requested.
“By relying solely on technology-focused metrics, IT is missing an opportunity to engage in effective dialogue with the business to move toward proactive service management,” says Dean Kara, business development manager responsible for end-user experience solutions at Compuware South Africa.
According to Kara, end-user experience (EUE) monitoring addresses these challenges by providing IT with visibility into the quality of service from the end user’s perspective. EUE allows IT to communicate more effectively with the business, establish realistic and shared expectations and effectively priorities efforts according to business impact.
According to Jean-Pierre Garbani, vice-president and principal analyst with Forrester Research: “The ultimate judge of IT and business alignment is the end user: If alignment is viewed as conformity to user expectations in terms of availability, performance, usability, and accuracy, then monitoring end user performance is the only way IT knows that it is meeting these expectations.”
When asked about the cost of poor application performance, 57% of respondents in the commissioned study stated increased costs to the business as a result; 48% reported that poor performance resulted in lost revenue. This demonstrates a clear understanding of the potentially dramatic financial impact resulting from poorly managed IT service.
Other reasons given for financial impact to the business includes negative impacts to external customer satisfaction (48%) slows or stops in production (42%) and a negative impact on sales performance.