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Exploring Service-Level Agreements and Assurances of Performance

Some industries mature extremely rapidly; others are continually defined through the interaction of customers and suppliers over time. The burgeoning ASP industry is quickly being defined by the level of services provided to customers, yet these performance guarantees are rarely quantified. The purpose of the Service Level Agreement (SLA) is to define the minimum acceptable performance metrics for an ASP. The industry is still waiting for this practice to take hold in a broader context.

A Service Level Agreement is actually a commitment from the ASP to provide consistent levels of uptime, performance, and accuracy of transactions from e-commerce sites. These SLAs are evolving, and like many aspects of the ASP model are being influenced by the role of early adopters in this marketplace. The continued growth of outsourcing is driving the development of these SLAs into documents that are actionable.

When creating your specific Service Level Agreement, quantify key performance variables and their allowable ranges. If you're familiar with the tools used for managing scalability, be sure to use the metrics associated with those tools in your SLA.

The key success factors to include in a series of metrics for your Service Level Agreement are profiled in the following discussions. Keep in mind that with a Service Level Agreement you can structure the contract to list and quantify your expectations for performance. Although many ASPs are not yet to the point of providing a month's free services if servers hosting your applications are inoperable on a Monday morning from 8–12, for example, you can stress the need for concessions based on performance.

Set required performance levels to define the key attributes that an SLA needs to meet to fulfill contractual agreements. The most important is the percentage uptime metric.

Percentage Uptime

Most hosting companies and ASPs can provide this metric, and many specify 98%. With many of the larger Web sites hosted internally to companies, uptime is hovering around the 99% range. The statistics provided here are the minimum quality standards. You should hold an ASP to at least the same level of performance.

Quality of Service

This metric measures how long your ASP takes to solve technical problems and work through the development of modifications to its applications. The integration of legacy data and the extent of its functionality also provides a measuring stick for the level of quality of service provided by the ASP.

User Satisfaction

Taking the initiative to understand your customers and their experiences on your site is crucial for the long-term growth of your business. Gauging how many visitors become customers and how many customers become repeat purchasers is a metric closely tied to the scalability of the site. Agree with your ASP to set a minimal customer-satisfaction ranking through a mutually-agreed-upon methodology to ensure that your customers get the service they expect.

User Expectations

Using the metrics of uptime and response to requests, in addition to the metrics of how your company is perceived by customers, can be written directly into the SLA. A typical agreement for service quality levels is rather broad and global. Strive to get individualized metrics into the SLAs that you write with your ASP(s). It's crucial to have those targets in place before a site or application goes online.

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