Poems For Wishing Tree

Service Level Management as a strategic tool

Author: Mag Eric Kaltman, Senior Consultant TEMA
Under the dogma "Entrepreneurial Security in Action" is a major focus of the management task in the application of an efficient methodology for implementation and ongoing management of strategic objectives at the operational level. In the posts on SRPI has already been discussed in detail on how strategically relevant performance indicators and identified as part of process optimization by using reference models can be improved. Today it is the efficiency of the SRPIs as service levels of internal (corporate) or outsourced services.

is what the strategic relevance of service level management:

• service levels define the need-based design of services
• service levels are a tool for cost control (lower service level = lower costs)
• SRPI-correlating service levels provide a direct implementation of strategic objectives relevant
• service levels (vs. cost) support strategic "make or buy decisions
• The settlement model of services (which is included in the standard price, which is individual charged against it) affected the "consumption"

Which services and what organizational environment is service level management is an appropriate method

The focus of SLM is naturally in the environment of corporate Services (ie Central Purchasing, IT, Finance or Human Resources as a corporate service for several group companies) and as an indispensable element in the outsourcing of services. The idea may lie close to refer to their service levels and costs, for performance optimization of the performance of individual regions or departments, the authors argue, however, that is sufficient in such cases is usually the collection and benchmarking of individual SRPIs.

conditions and procedure for implementation:

The most important - and by many underestimated - a challenge for the implementation of service management is the definition of the service structure and the exact description of the content in these "products" included activities and related assets for service delivery. Suppose IT offers its service catalog is a product "standard workstation" at:

• What hardware is provided renewed after how many years?
• Which software licenses and annual maintenance fees for this are included? If
• contain the associated Directory Server / File & Print servers and their support in the price?
• Which assets for software distribution and call management are included?
• What services are included in the standard price (eg help desk) which services are charged separately (eg IMACs - Install - Move - Add - Change) are

main design feature for us to structure the services have their market conformity, for it is a prerequisite for performance and price benchmarks in the industry as well as in the non-profit organizations (such as credits for funding bodies). The second design feature is the correlation with the SRPIs to ensure that these are projected correctly in a service. Here the experience of the respective division manager or consultant are required.

The process model in the figure provides an overview of the overall model:

Let's try an example representation of possible SRPIs for Central Purchasing: Adopted

they have in the company's strategic aims for purchasing the improve the economy of scale and reduction of lead times in the order process defined as targets, crowd as SRPIs almost on

• The increase in purchase volume per active supplier (according to material groups)
• The reduction in the number of active suppliers
• The ratio (in%) of the active purchasing volume of master agreements
• etc.

An increase in the volume of orders per order in contrast, could be counter-productive, because inducing the also increase the storage capacity and capital commitment.
Similar examples can be, for example. define for the improvement of delivery reliability, product quality or delivery time (ie typical SLs for purchasing) with ease. In addition to the action in the model as "operational SLs" defined indicators - mainly in our example the price of purchased materials and services - are the SRPIs a perfect service level based on the implementation of strategic objectives. Some service levels result also makes sense only if they are made in combination with others. Operational procurement costs as a percentage of purchase volume (the SL can be a good indication if there is no costing is implemented) are only meaningful when there is the same price as the amount of development information.

change management, SLA evaluation rules, Pönalevereinbarungen, escalation procedures etc., are essential components of the service level agreements. They regulate the procedures for any changes in requirements as well as the actions and consequences in the event of an error (broken down into levels of urgency).

the internal transfer model, the necessary external service prices are added to the internal activities (at least one "management shares" remains even with outsourced services companies) and charged on relevant quantitative indicators, via internal activity allocation on the performance relating cost centers and orders. A settlement of internal activity allocation is always preferable to a levy approach, because the former quantity-based PPP support and the pay in the absence of different distribution key for plan / actual does not allow meaningful analysis of plan-actual value deviation.