Abstract
Traditionally, a Service Level Agreement (SLA) including service level metrics is used as an appendix in IT Service Management agreements to define the terms and conditions of delivery and set expectations. However, SLA neither implies nor guarantees the added values that are expected by the customer. Besides, due to the nature of IT services, there always exists uncertainty about the agreed services due to which the perceived risk for both customer and provider is high. Moreover, the quality and quantity of delivered values are mostly hidden by hazy marketing slogans. In order to guarantee the values of an offered service, the deliverable added values should be characterized properly, quantified by means of measurable metrics, and agreed upon between the two parties. Such comprehensive material, including the deliverable added values along with their measurable metrics, is called Service Value Agreement (SVA). This research proposes a platform for IT service offerings based on added values by identifying, as well as quantifying, an organization’s objectives in purchasing Application Management (AM) services from a provider firm.
Highlights
The primary processes and tasks in most organizations have become strongly IT service dependent [1]
Service Value Agreement (SVA) defines metrics in order to assess the maturity of service providers in value delivery and resolves the ambiguities concerning “to what extent should values be delivered?”
Service Level Agreement (SLA) shortcomings, at the current stage, as well as customer’s expectations from IT services outsourcing were investigated and an SVA was introduced as a tool for fulfilling the outlined shortage
Summary
The primary processes and tasks in most organizations have become strongly IT service dependent [1]. Globalization, new entrants [5], and most recently adding value to the customers’ businesses are pressures which service providers are dealing with. This trend is perceptible from citations such as “global sourcing is the wave of globalization” [6] and statistics; in 2007, IBM’s revenue from service sector was $54B [7] while in 2011 it had gone up to $144B [8]. While the external and internal pressures initiated the movement toward global delivery models, the convergence of hardware, software, and services has accelerated the adoption of this model and has the potential to entirely transform the models of IT service delivery This convergence is likely to be driving the longterm growth of the IT services delivery sector. Service Value Agreement (SVA) identifies the high level business added values required by organizations and quantifies the extent of their achievements by means of metrics
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