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SLA Management Handbook

Volume 1
Executive Overview

GB 917-1
Member Evaluation Version 2.0
TeleManagement Forum 2004

July 2004

Page ii

SLA Management Handbook Vol 1

Notice
The TeleManagement Forum (TM Forum) has made
every effort to ensure that the contents of this
document are accurate. However, no liability is
accepted for any errors or omissions or for
consequences of any use made of this document.
This document is a draft working document of TM
Forum and is provided to its members solely for formal
comments and evaluation. It is not a Forum Approved
Document and is solely circulated for the purposes of
assisting TM Forum in the preparation of a final
document in furtherance of the aims and mission of
TM Forum. Any use of this document by the recipient
is at its own risk. Under no circumstances will TM
Forum be liable for direct or indirect damages or any
costs or losses resulting from the use of this document
by the recipient.
Members of TM Forum are granted limited copyright
waiver to distribute this document within their
companies. They may not make paper or electronic
copies for distribution outside their companies. The
only purpose of the provision of this draft document to
members is for making formal comments thereon to
TM Forum.
This document may involve a claim of patent rights by
one or more TM Forum members, pursuant to the
agreement on Intellectual Property Rights between
TM Forum and its members, and by non-members of
TM Forum.
Direct inquiries to the TM Forum office:
89 Headquarters Plaza North - Suite 350
Morristown, NJ 07960 USA
Tel No. +1 973 292 1901
Fax No. +1 973 993 3131
TM Forum Web Page: www.tmforum.org

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Acknowledgements
TeleManagement Forum would like to thank the following individuals for contributing
their time and expertise to the production of this Volume 1 to the SLA Management
Handbook 4 Volume Suite GB 917 Version 2.
Malcolm Sinton, QinetiQ, (Team Leader)
Greg Bain, National Communications System (NCS)
Debbie Burkett, TeleManagement Forum
Jane Hall, GMD FOKUS
Peter Huckett, ACTERNA
Ranveer (Ran) Rathore, NASA
Tobey Trygar, Telcordia Technologies (Volume 2 Editor)
Lightsey Wallace, Lightsey Enterprises (Team Leader 2001 - 2002)
A number of people have provided input and comments to the work of the team.
Although not an exhaustive list, the TeleMangement Forum also extends a thank you
to the following individuals for their contributions.
David Banes, The Open Group (TenTen Communications)
Alessandro Zorer, Sodalia SpA
Bill DeYoung, Verizon (Team Sponsor to 2001)
Hkan Kappelin, Ericsson
Hans Pettersson, EHPT
Han-Young Lee, Korea Telecom
Jock Embry, Opening Technologies
John Gormont, Spirent Communications
Mahmood Karbasi, Oracle
Paul Short, TeleManagement Forum
Peter Jasion, Tivoli
Sandro Borioni, Sodalia SpA
Stephen Cross, Nortel Networks
Veli Kokkonen, Sonera

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About TeleManagement Forum


The TM Forum is an international consortium of communications service providers
and their suppliers. Its mission is to help service providers and network operators
automate their business processes in a cost- and time-effective way. Specifically, the
work of the TM Forum includes:
Establishing operational guidance on the shape of business processes.
Agreeing on information that needs to flow from one process activity to
another.
Identifying a realistic systems environment to support the interconnection
of operational support systems.
Enabling the development of a market and real products for integrating
and automating telecom operations processes.
The members of TM Forum include service providers, network operators and
suppliers of equipment and software to the communications industry. With that
combination of buyers and suppliers of operational support systems, TM Forum is
able to achieve results in a pragmatic way that leads to product offerings (from
member companies) as well as paper specifications.

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About this document


This is a TM Forum Guidebook. The guidebook format is used when:
The document lays out a core part of TM Forums approach to
automating business processes. Such guidebooks would include the
Telecom Operations Map and the Technology Integration Map, but
not the detailed specifications that are developed in support of the
approach.
Information about TM Forum policy, or goals or programs is provided,
such as the Strategic Plan or Operating Plan.
Information about the marketplace is provided, as in the report on the size
of the OSS market.

Document Life Cycle


GB 917-1 is the initial version of Volume 1 of the SLA Management Handbook
Version 2.0. The four Volumes of Version 2.0 of the SLA Management Handbook
supersede the previous versions of the SLA Management Handbook.

Document History

Version

Date

Purpose

Development Version 0.1

October 2001

1st mapping of existing text into Vol 1

Development Version 1.0

February 2003

Output from Brussels Meeting

Development Version 1.1

July 2003

Revision from Malvern 1 Meeting

Development Version 1.2

November 2003

Input to Malvern 2 Meeting

Development Version 1.3

January 2004

Input to Dublin Meeting

Development Version 1.4

May 2004

Input to Bristol Meeting

SAC Review Version 1.8

June 2004

Submitted for SAC Review

Member
2.0

July 2004

Cosmetic changes & fixes to match


template etc.

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Evaluation

Version

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Posted to web for Member Evaluation

Time Stamp
This version of the SLA Management Handbook is valid until a revision is issued.

How to obtain a copy


This document version is available from the TMF Central Web Site.

How to comment on this document


Readers are encouraged to provide comments to the SLA Management Team via
email.
Suggestions for comments:
1. In order to reduce file size, comments should excerpt only relevant paragraphs,
including identifying paragraph headers.
2. Be specific. Consider that you might be on a team trying to produce a single text
through the process of evaluating numerous comments. We appreciate significant
specific input. We are looking for more input than a word-smith, however
structural help is greatly appreciated where clarity benefits.
3. What to look for: errors, omissions, lack of clarity and missing references to other
accomplished work (please cite exact applicable section(s) of other documents).
4. Questions that provide direction for the team to further develop or expand a
specific area are welcome. However, the reader should be aware that this work is
intended to be a handbook not an exhaustive thesis, and that we do not intend to
duplicate other work.
5. Email all comments to the document Editor, Tobey Trygar, ttrygar@telcordia.com,
with a copy to the team leader, Malcolm Sinton, mjsinton@qinetiq.com.

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Executive Summary
Demonstrably in the modern business world e-business has either a direct or indirect impact on all
business enterprises. More and more companies are increasingly dependent on telecommunication
services as a core component of business strategy. The quality of telecommunication services is
therefore rapidly becoming a significant factor in the success or failure of businesses, particularly with
regard to availability and reliability. It is the Service Level Agreement (SLA) that defines the
availability, reliability and performance quality of delivered telecommunication services and networks
to ensure the right information gets to the right person in the right location at the right time, safely and
securely. The rapid evolution of the telecommunications market is leading to the introduction of new
services and new networking technologies in ever-shorter time scales. SLAs are tools that help
support and encourage Customers to use these new technologies and services as they provide a
commitment from SPs for specified performance levels.
The TM Forum SLA Handbook (GB 917 Version 1.5) was released by the TM Forum in June 2001.
The objective of GB 917 was to assist Customers and Telecommunication Service Providers (SP)
with understanding the fundamental issues involved with developing telecommunication services
SLAs and SLA management. GB 917 Version 1.5 incorporates the concepts within the Performance
Reporting Concepts and Definitions Document (TMF 701) and the Telecommunication SP to
Customer Performance Reporting Business Agreement (NMF 503) documents. These two
documents offer a valuable extension to GB 917.
GB 917 Version 1.5 was based on the traditional telecommunications SP to Customer relations
embedded within the International Telecommunication Union (ITU) Telecommunication Management
Network (TMN) Framework model and the TM Forum generated Telecommunications Operating
Model (TOM) functional processes. Since GB 917 Version 1.5 there have been many significant
advances within the telecommunications SP industry. There is now a need to address these recent
advances in the context of how telecommunication SP to Customer relations are managed and the
impacts on SLAs and SLA management.
The more important external and internal telecommunication SP advances that have made significant
influential impact and need to be taken into consideration are, inter alia:

A new breed and types of Service Providers such as, Internet, Application and Content;

New services enablers such as Security and Mobility;

A move towards network centric architectures enabling e-commerce;

A realization that Enterprise Customer issues need to be given greater consideration and
prominence;

Increased Enterprise Customer and SP expectations;

A significant increase in the number of interconnections and interfaces to enable end-toend services;

The need for greater and improved use of automation;

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An awareness of the limitations of SP internal processes such as, improvements to


Operational Support Systems (OSS);

The need to address deregulation within the telecommunications industry;

Moves towards a more seamless SP to Customer Service Access Point (SAP) or Service
Delivery Point (SDP).

The main impact of recent telecommunication advances is added complexity to SP-Customer


relations. Added complexity was recognized by the TM Forum in 2001 by acknowledging that the
TOM model lacked sufficient detail to account for recent telecommunication advances and embarked
on a new SP and Customer relation management paradigm. This new management paradigm has
evolved into what is now referred to as the enhanced TOM (eTOM). The eTOM includes those
processes necessary to manage SLAs and Quality of Service (QoS).
The TM Forum SLA/QoS Handbook Team also realized that the first GB 917 SLA Management
Handbook lacks sufficient detail and management processes to cater for the breadth of SLAs needed
within a modernized Telecommunication SP industry. GB 917 Version 1.5 has therefore been revised
to include the SLA management processes necessary to handle recent telecommunication advances
as well as the TMF instigated eTOM.
The revised TM Forum SLA Handbook is designated GB 917 Version 2 and structured as a four
Volume suite. Volumes 1, 2 and 3 focus on telecommunication services SPs, Suppliers and
Customers whereas Volume 4 focuses on Enterprise business applications and associated
telecommunication services. The four volumes are entitled:

Volume 1 SLA Management Handbook - Executive Overview;

Volume 2 SLA Management Handbook - Concepts and Principles;

Volume 3 SLA Management Handbook - Service and Technology Examples;

Volume 4 SLA Management Handbook - Enterprise Perspective.

Volume 1 is written for Chief Executive Officers (CEO) and Board of Directors members. It is a
concise introduction to SLA Concepts, Business Case, Benefits, and Consequences for
telecommunication service customers, SPs, and hardware and software suppliers. Volume 1 also
addresses where SLAs reside within the modern market place.
Volume 2 is written for the telecommunication and supplier managers. It provides the detail behind
SLA principles such as Service Access Point (SAP), Service Delivery Point (SDP), SLA management
process mapping onto eTOM, service parameter framework, and measurement and reporting
strategies.
Volume 3 is written for Telecommunication and Supplier implementers. It describes how to apply the
SLA principles defined in Volume 2 to a representative set of technologies. Volume 3 also includes a
checklist of items typically included within telecommunication service SLAs.
Volume 4 is written for enterprise managers and implementers. It addresses business application
and services as well as internal and external network services. In this context it generically describes

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enterprise performance requirements for end-to-end services. A number of enterprise business


applications of SLAs are described in detail.
For business enterprises, be they end Customers, SPs or Suppliers, to embrace SLAs a business
case must be made. Volume 1 approaches the business case from the point of view that information
related to product lines and transfer of information enabled by telecommunication services and
networks is the life blood of business enterprises. It is business enterprise information that must be
properly understood, managed and assured for business enterprises to sustain growth and not fail.
Understanding business information is termed Information Management (IM). Protecting business
information is termed Information Assurance (IA). Telecommunication services and networks are
indispensable for conducting commercial, government and academia business. However, service
and network Level of Service (LoS) and QoS performance is only as good as that supported by the
service and network architecture design. This limitation may result in telecommunication services and
networks under performing against the desired business enterprise requirement thereby introducing
business risks that may have far reaching consequences to the survival of business enterprises.
Therefore for enterprises to be assured of business survival, business application LoS and QoS
performance requirements must be accurately mapped into the telecommunication services and
networks QoS performance parameters, metrics and thresholds incorporated within business
enterprise internal and external SLAs. Ultimately, it is the CEO that is responsible for corporate
business enterprise IM, IA and determining business application LoS and QoS performance. The
telecommunication service and networks supporting business enterprises must provide capability to
meet the required LoS and QoS performance needs. For business enterprises to commit to and
embrace SLAs there is a need to conduct a Balance of Investment (BoI) to be assured that SLAs will
benefit the business. The SLA BoI must into account all factors associated with SLA benefits,
consequences, incurred whole life costs, improved revenue and profitability, understanding the
content of business information as well as the required level of LoS and QoS performance. Volume 1
introduces some of the major benefits and consequences for end Customers, SPs and Suppliers
when implementing, embracing and supporting SLAs. The listed benefits and consequences is not
intended to be all inclusive.
For end Customers, SPs and Suppliers CEOs and Board members accepting that adopting SLAs is
considered a progressive adjunct to business enterprise strategy, Volume 1 provides suggested
possible next steps towards implementing, embracing and supporting SLAs. These next steps range
from a review of business strategies, gap analysis, information content, processes, cost-benefit
analysis, current services and supporting SLAs, training needs analysis to future service plans,
marketing strategies and outsourcing strategies.
For convenience Volumes 2, 3 and 4 Executive Summaries are at Annexes A, B and C to this
Volume 1 Executive Overview.

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Table of Contents
Notice ............................................................................................................................................... ii
Acknowledgements ...................................................................................................................... iii
About TeleManagement Forum.................................................................................................... v
About this document .................................................................................................................... vi
Executive Summary .................................................................................................................... viii
Table of Contents .......................................................................................................................... xi
List of Figures ............................................................................................................................... xv
Chapter 1 -

Introduction ............................................................................................................. 1

1.1

Background ..................................................................................................................... 1

1.2

The Evolving Marketplace .............................................................................................. 1

1.2.1

SLAs in the Evolving Marketplace .......................................................................... 2

1.3

SLA Drivers ..................................................................................................................... 3

1.4

SLA Management Handbook Background .................................................................... 4

1.5

Revised SLA Management Handbook.......................................................................... 5

1.5.1

Designation.............................................................................................................. 5

1.5.2

Aim........................................................................................................................... 5

1.5.3

Structure .................................................................................................................. 5

1.5.4

Purpose ................................................................................................................... 6

1.5.5

Intention ................................................................................................................... 7

1.5.6

Goal.......................................................................................................................... 7

1.6

Scope .............................................................................................................................. 8

1.7

Industry Interest............................................................................................................... 8

1.8

Handbook Purpose and Content.................................................................................... 9

1.8.1

Volume 1 Executive Overview............................................................................. 9

1.8.2

Volume 2 Concepts and Principles...................................................................... 9

1.8.3

Volume 3 Examples and Use Cases................................................................. 10

1.8.4

Volume 4 Enterprise Perspective ...................................................................... 10

Chapter 2 2.1

SLA Business Case.............................................................................................. 12

The Business Model ..................................................................................................... 12

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2.1.1
2.2

Balance of Investment .......................................................................................... 13

Market Forces ............................................................................................................... 13

2.2.1

General.................................................................................................................. 13

2.2.2

Telecommunications Market Liberalization.......................................................... 14

2.2.3

New Technology-Based Services ........................................................................ 14

2.2.4

IT Departments...................................................................................................... 14

2.2.5

Customer Care Services....................................................................................... 15

2.2.6

SLA Unifying Concepts......................................................................................... 15

2.2.7

Service Driven SLAs ............................................................................................. 15

2.2.8

Market Value Chain............................................................................................... 15

2.2.9

Service Performance ............................................................................................ 16

2.2.10 Customer Satisfaction........................................................................................... 16


2.2.11 Complexity............................................................................................................. 16
2.2.12 Improved Reporting............................................................................................... 16
2.2.13 Guarantees............................................................................................................ 16
Chapter 3 3.1

Benefits .................................................................................................................. 18

Service Providers (SP) ................................................................................................. 18

3.1.1

Customer Retention .............................................................................................. 18

3.1.2

Understanding Business Requirements............................................................... 18

3.1.3

Acquiring New Customers .................................................................................... 18

3.1.4

Performance Expectations.................................................................................... 19

3.1.5

Resource Utilization .............................................................................................. 19

3.1.6

Differentiates SPs.................................................................................................. 19

3.1.7

Introduce Operational Changes............................................................................ 19

3.1.8

Improve Internal Measurements........................................................................... 19

3.1.9

Improved Customer Reporting ............................................................................. 19

3.1.10 Enrich Customer Relations ................................................................................... 20


3.1.11 Summary ............................................................................................................... 20
3.2

Enterprise Customers................................................................................................... 20

3.2.1

Business Information and Requirements ............................................................. 21

3.2.2

Qualify SPs............................................................................................................ 21

3.2.3

Selecting Services................................................................................................. 21

3.2.4

Verification and Validation .................................................................................... 21

3.2.5

Negotiations........................................................................................................... 21

3.2.6

Security Management........................................................................................... 21

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3.2.7

Expectations .......................................................................................................... 22

3.2.8

Summary ............................................................................................................... 22

3.3

Hardware and Software Suppliers ............................................................................... 22

3.3.1

Performance Parameters...................................................................................... 23

3.3.2

Reports .................................................................................................................. 23

3.3.3

Summary ............................................................................................................... 23

Chapter 4 -

Consequences ...................................................................................................... 24

4.1

Introduction.................................................................................................................... 24

4.2

Service Provider (SP) ................................................................................................... 24

4.2.1

Better Understanding of end Customer Drivers ................................................... 24

4.2.2

Training .................................................................................................................. 25

4.2.3

System Re-engineering ........................................................................................ 25

4.2.4

Open Management Interfaces .............................................................................. 25

4.2.5

Service and Network Product Documentation ..................................................... 25

4.3

End Customer Enterprises ........................................................................................... 25

4.3.1

Business Information............................................................................................. 25

4.3.2

SLA Negotiation..................................................................................................... 26

4.3.3

SLA Management ................................................................................................. 26

4.3.4

SP OSS and BSS Integration ............................................................................... 26

4.3.5

Training .................................................................................................................. 26

4.3.6

Internal Systems Design ....................................................................................... 26

4.3.7

Industry Participation Forums ............................................................................... 27

4.4

Hardware and Software Suppliers ............................................................................... 27

4.4.1

Understanding Customer and SP Business Processes ...................................... 27

4.4.2

SP OSS and BSS Integration ............................................................................... 27

4.4.3

Industry Forum Participation ................................................................................. 27

Chapter 5 5.1

Next Steps.............................................................................................................. 28

Immediate......................................................................................................................28

5.1.1

CEO Question Phase............................................................................................ 28

5.1.2

SLA Implications.................................................................................................... 28

5.1.3

Gap Analysis ......................................................................................................... 29

5.1.4

Cost-Benefit Analysis ............................................................................................ 29

5.2

Areas For Review ......................................................................................................... 29

5.2.1

Current Services and SLAs................................................................................... 29

5.2.2

Strategic Business Plans ...................................................................................... 29

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5.2.3

Roles and Responsibilities.................................................................................... 30

References .................................................................................................................................... 31
Acronyms ...................................................................................................................................... 32
Annex A: Executive Summary Volume 2 Concepts and Principles .................................. 34
Annex B: Executive Summary Volume 3 Service and Technology Examples ................ 36
Annex C: Executive Summary Volume 4 Enterprise Perspective ..................................... 38

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List of Figures
Figure 1-1 SLA Positioning within the Business Enterprise MVC ............................... 3
Figure 1-2 Four-Volume SLA Handbook (Issue 2) Relationship .................................. 6
Figure 1-3 SLA Handbook (Issue 1) Spread of Interest ................................................. 8
Figure 1-4 SLA Handbook (Issue 1) Department Interest.............................................. 9

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Chapter 1 - Introduction

1.1 Background
Demonstrably in the modern business world e-business has either a direct or indirect
impact on all business enterprises. More and more companies are increasingly dependent
on telecommunication services as a core component of business strategy. The quality of
telecommunication services is therefore rapidly becoming a significant factor in the
success or failure of businesses, particularly with regard to availability and reliability. It is
the Service Level Agreement (SLA) that defines the availability, reliability and performance
quality of delivered telecommunication services.
It can be argued that SLAs have not always commanded a good press. That said,
customer enterprise CEOs always ask Am I getting what Ive paid? or Am I getting value
for money? On the other hand Telecommunication Service Provider (SP) CEOs always
ask, Is the Customer getting what he has paid for? or How can we improve our service
and be more cost-effective? So do Telecommunication SP and Customer business
enterprise CEOs need to be concerned about SLAs and what benefit SLAs bring to an
organizations bottom line?
The rapid evolution of the telecommunications market is leading to the introduction of new
services and new networking technologies in ever-shorter time scales. SLAs are tools that
help support and encourage Customers to use these new technologies and services as
they provide a commitment from SPs for specified performance levels.
The high dependency on the availability of networks and communication and information
transfer services for an increasing number of critical business activities means that
Customer enterprises are seeking SLA Guarantees to enable them to conduct business
cost-effectively, at minimal risk. Also, IT departments are being measured by the service
levels they provide to other business units within their own organization and must
demonstrate their ability to deliver on internally generated SLAs.

1.2 The Evolving Marketplace


The telecommunications marketplace is dynamic and constantly evolving resulting in
many significant recent advances within the telecommunications SP industry. The more
important recent advances within the telecommunications industry that have made
significant influence and need to be taken into consideration are, inter alia:

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New breed and types of SPs such as, Internet, Application and Content;

New services enablers such as, Security and Mobility;

A move towards network centric architectures enabling e-commerce;

A realization that Enterprise Customer issues need to be given greater


consideration and prominence;

Increased Enterprise Customer and SP expectations;

A significant increase in the number of interconnections and interfaces to


enable end-to-end services;

The need for greater and improved use of automation;

An awareness of the limitations of SP internal processes such as,


improvements to Operational Support Systems (OSS);

The need to address deregulation within the telecommunications industry;

Moves towards a seamless SP to Customer Service Access Point (SAP)


or Service Delivery Point (SDP).

1.2.1 SLAs in the Evolving Marketplace


The purpose of the SLA Management Handbook is to assist two enterprise businesses in
developing Service Level Agreements (SLA) for their telecommunication services by providing
a practical view of the fundamental issues involved. The two enterprise may be an end
Customer and a SP or two SPs. In the latter case of two SPs, one SP acts as an end
Customer buying services from the other SP.
The basis for the SLA Management Handbook is the development of SLAs for a business
enterprise end Customer derived from the telecommunication service requirements needed to
support the business applications. These telecommunication service requirements are
presented to a SP and the two parties negotiate the specific set of SLA parameters and
parameter values that best serves both parties. The agreed SLA requirements flow down
through the SP organization and become the basis for its internal management and Quality of
Service (QoS) processes. For the enterprise end Customer, the SLA telecommunication
service requirements serve as the foundation for internal network or business services.
SLAs are excellent tools for establishing end Customer and SP business relationships. Wellcrafted SLAs set expectations for all elements of the required service and provides a basis for
managing both end Customer and SP performance expectations. SLAs assists in supporting:

The value of operational change;

Improved internal measurement and reporting;

Improved Customer reporting;

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Trend analyses;

Improved Customer relations;

A vehicle for potential differentiation from their natural competitors;

Service Level Guarantees (SLG), if appropriate.

Within the modern era of network centric telecommunication services provision, it is important to
be clear as to where and why SLAs are needed within end-to-end service provision architectures.
As MVCs become more complex, multiple SPs are becoming involved in the provision of
telecommunication services to end customers. SLAs need to be concluded throughout the MVC
such that end Customers are provided with the required SLA support by the retail SP. SPs
involved in telecommunication services provision require a common understanding of service
quality performance and guarantees as well as a consistent approach to SLA management in
order to support service delivery commitments.
SLAs are found throughout the enterprise MVC from end Customer through SP to Supplier. A
typical spread of SLAs within the end-to-end communication services provision architecture
supporting the MVC is depicted in Figure 1-1 below.

SLA

Business
Application

SLA

Business
Application

Business
Service

SLA

SLA

SLA

Business
Service

SLA

Service
Provider

SLA

Internal
Network
Service

Service
Provider

SLA

Business
Service

SLA

External Network
Service
SLA

SLA

Internal
Network
Service

Figure 1-1 SLA Positioning within the Business Enterprise MVC

1.3 SLA Drivers


Several driving forces place a new emphasis on specifying QoS in SLAs. However, the two
most significant drivers are the opening up of the telecommunication market to competitive
service provision and the explosion in e-business. Both these factors require high levels of

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performance from network and associated services, such as servers, databases and the
development and deployment of services based on network technologies. New network
technologies based on Cell, Frame and Packet raise new QoS issues over traditional circuitbased services in terms of monitoring and collection of performance data and mapping that
data into QoS performance reports.
Agreement on terms and definitions for QoS parameters, performance parameters,
measurement and reporting is key to constructing and managing SLAs between SPs and
end Customers. Apart from functionality and price, service quality is an increasingly
important factor for end Customers in the competitive telecommunication market. Some
would say that QoS is now the number one purchasing factor in selecting telecom services,
particularly for end Customer enterprises.

1.4 SLA Management Handbook Background


The TM Forum SLA Handbook addresses the issues surrounding the availability, reliability
and performance quality of delivered telecommunication services.
The first TM Forum SLA Handbook is GB 917 Version 1.5 dated June 2001. The objective
of GB 917 Version 1.5 was to assist telecommunication Service Providers (SP) with
understanding the fundamental issues involved with developing telecommunication
service(s) SLAs and SLA management. GB 917 Version 1.5 was largely written by
Telecommunication SP managers and therefore appears biased towards the way
Telecommunication SPs manage and operate their internal business processes and how
they wish to present telecommunication services to enterprise business customers.
GB 917 Version 1.5 was based on the traditional telecommunications SP to Customer
relations embedded within the functional processes incorporated in the
Telecommunication Networks Management (TMN) Framework model and, more latterly,
the TM Forum generated Telecommunications Operating Map (TOM) model.
Since GB 917 Version 1.5 there have been many significant recent advances within the
telecommunications SP industry. There is now a need to address these recent advances
in the context of new Telecommunication SP to Customer relations and their impacts on
SLAs and SLA Management.
Despite the many recent technological advances within the telecommunication SP
industry, the TM Forum SLA/QoS Handbook Team considers that the TM Forum GB 917
Version 1.5 SLA definition remains valid:
A SLA is a formal negotiated agreement between two parties. It is a contract that exists
between the Telecommunication SP and business Customer. A SLA is designed to create
a common understanding about telecommunication service quality, priorities and
responsibilities. SLAs can cover many aspects of the relationship between the SP and
Customer, such as performance of services, customer care, billing and service
provisioning.

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Also, that the agreed SLA service, technical, and non-technical parameter metric and
threshold levels and their management is the prime purpose of a SLA.
The main impact of taking recent telecommunication advances into consideration is added
complexity to SP to Customer relations. This conclusion was recognized by the TM Forum
who acknowledged that the TOM model lacked sufficient detail to account for recent
telecommunication advances and embarked on a new SP to Customer relationship
management paradigm. This new management paradigm has evolved into what is now
referred to as the enhanced TOM (eTOM). The eTOM has an associated system view
represented by the System Information Data (SID) and an implementation technology
represented by the New Generation Operational Systems and Software (NGOSS).
This revised TM Forum SLA/QoS Management Handbook takes into account both the
impacts of recent advances within the telecommunications SP industry, delivered
telecommunication services and new SP to Customer relationship management
paradigms described within the eTOM business processes models.

1.5 Revised SLA Management Handbook


1.5.1 Designation
This new SLA Management Handbook is designated GB 917 Version 2.

1.5.2 Aim
The aim of GB 917 Version 2 is to provide SP, Customer and Supplier Chief
Executive Officers (CEO), Managers and Implementers with a better
understanding of how to develop and improve SLAs and SLA Management in
order to sustain business growth.

1.5.3 Structure
GB 917 Version 2 is structured as a four-Volume suite. The four volumes are
entitled:

SLA Handbook Volume 1 Executive Overview;

SLA Handbook Volume 2 Concepts and Principles;

SLA Handbook Volume 3 Service and Technology Examples;

SLA Handbook Volume 4 Enterprise Perspective.

The most significant SLA advance addressed by GB 917 Version 2 is to treat


telecommunication service delivery as capability to meet the needs of business

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information and application requirements from an end-to-end perspective. In this


regard Volume 2 addresses generic SLA Concepts and Principles, Volume 3
addresses examples of service types over different telecommunication network
technologies and Volume 4 addresses the Enterprise Perspective. The fourVolume relationship is depicted in Figure 1-2 below.

Volume 1: Executive Summary


Volume 4
Business
Application

Business
Application

Volume 2 & 3
Business
Service

Business
Service

Network
Service

Service
Provider

Service
Provider

Network
Service

Business
Service

Network
Service

Figure 1-2 Four-Volume SLA Handbook (Issue 2) Relationship

1.5.4 Purpose
It is hoped that all types of SPs, customer businesses, consultants and hardware
and software suppliers will gain value from this revised four-Volume SLA
Management Handbook. Volume 1 (Executive Overview) is written for CEs and
Board members of SPs, businesses and suppliers alike to gain a brief
understanding of what SLAs are all about. Importantly, Volume 1 is intended to
provide an understanding of the benefits, as well as the consequences, to SP,
customer and supplier businesses by adopting SLAs. Volume 2 (Concepts and
Principles) is written for all types of managers involved with the delivery of
telecommunication services. Volume 3 (Service and Technology Examples) is
written for those responsible for implementing telecommunication services.
Volume 4 is written for customer business managers and implementers. It
addresses business application and services as well as internal and external
network services. Importantly, Volume 4 generically describes end Customer
performance requirements for end-to-end telecommunication services.
GB 917 Version 2 is designed to be a reference for telecommunication and end
Customer enterprises as they develop and require new telecommunication
services. It is hoped that the revised SLA Handbook will:

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Assist Telecommunication SP and end Customers conducting SLA


discussions;

Inform and educate about the intricacies of SLA and SLA Management;

Provide a structure for creating SLAs;

Enable both SP and Customer to agree acceptable and verifiable SLA


parameters, associated metric and threshold levels and their management.

That said, this revised SLA Management Handbook is not intended to provide a
collection of parameter, metric and threshold tables to be filled out without
knowledge of the underlying requirements and capabilities and technology and
service limitations.
The underlying SP and Customer management Business Support Systems (BSS),
Operational Support Systems (OSS) and business processes tend to be
proprietary as they have been developed for market competitiveness. Proprietary
management support systems and processes are therefore not covered within this
revised SLA Management Handbook. However, that said the revised Handbook
does provide sufficient information to be able to develop and manage BSSs, OSSs
and business processes in line with the MVC consistent with the TM Forum
NGOSS initiative.

1.5.5 Intention
The intention is that each Volume is able to standalone in its own right. Therefore,
for completeness, the Executive Summaries from each Volume in the Handbook
suite are included as Annexes to all other Volumes within the four-Volume suite.
Many of the concepts and principles raised in GB 917 Issue 1.5 remain valid and
have therefore been copied over into GB 917 Version 2. That said, GB 917 Issue
1.5 continues to remain available through the TM Forum Web-site and can be read
as a complementary document to this revised GB 917 Version 2 SLA
Management Handbook.

1.5.6 Goal
The revised SLA handbook has many goals, the most significant goals are to:

Assist SPs in developing new services with associated SLA parameters;

Align SLA parameters to meet Customer service requirements;

Assign internal processes to accord with SLA parameters;

Address all types of SLAs (internal, external, customer, supplier, SP);

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Provide a framework to develop an understanding of practical SLA


parameters;

Make SLA solutions available to a broader industry whilst protecting


individual competitive interests.

1.6 Scope
The scope of the revised SLA Management Handbook is limited to an
understanding of the principles, concepts, issues and neutral technologies involved
with developing SLAs within a telecommunication services driven marketplace
supporting business enterprises.
That said, the Handbook is not intended to address specific technology SLA
parameters, metrics and threshold limits.

1.7 Industry Interest


There has been significant interest in the TM Forum SLA Management Handbook
(GB 917 Version 1.5) since its public release in June 2001. The extent of interest is
shown in Figure 1-3 below. Figure 1-3 illustrates the spread of interest from over
5,000 SLA Handbook Downloads from the TM Forum public web site.

Cable 1%
Wireless 6%
SW 17%

ISP 6%
ASP 6%

System Integ
13%

New SP 7%
Incum bent SP
8%
Other 9%

Industry
Consultant
12%

Netw ork
Equipm ent
13%

Figure 1-3 SLA Handbook (Issue 1) Spread of Interest

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Figure 1-4 below, based on the same 5,000 SLA Handbook Downloads from the
TM Forum Public Web, indicates a broad interest and involvement within all
company departments. It is hoped that this revised SLA Management Handbook
will be equally well received by SPs, end Customers, Suppliers and Consultants
alike.

Corp mgt
9%

Customer
svc
8%

Operations
Mgt
14%

Sales/mktg
10%
MIS/IS/IT
12%

Engr Mgt
21%

Tech Mgt
13%

Net Svcs
13%

Figure 1-4 SLA Handbook (Issue 1) Department Interest

1.8 Handbook Purpose and Content


1.8.1 Volume 1 Executive Overview
This Volume 1 is the Executive Overview and provides a concise overview of the
purpose and content of each Volume within the four-Volume Handbook suite.
Volume 1 also provides an indication of the types of benefits and consequences of
business enterprises adopting SLAs to measure the availability, reliability and
quality performance of delivered telecommunication services.
Volume 1 briefly describes where and why SLAs are positioned within an end-toend services provision architecture. It shows how well-negotiated and constructed
SLAs can benefit Telecommunication SP, Customers and Hardware and Software
Supplier enterprises alike and introduces the concepts of SLAs and SLA
Management. Volume 1 indicates what next steps should be taken for those
Telecommunication SP, end Customer and Supplier enterprises interested in
developing new or already existing SLAs and acts as a CEO and Board level SLA
and SLA management briefing document.

1.8.2 Volume 2 Concepts and Principles


There are a number of SLA Management concepts and principles that need to be
understood prior to embarking on SLA negotiations. Volume 2 provides the

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management level reader with an in-depth understanding of the concepts and


principles surrounding the structure of SLAs and SLA Management.
A short summary of the SLA Management concepts and principles addressed
within Volume 2 is given below.

1.8.3 Volume 3 Examples and Use Cases


Volume 3 uses the essential SLA concepts and principles to provide a checklist of
areas that could potentially be included within SLAs as well as presenting seven
technology examples of applying SLA concepts and principles. The technology
examples include Lease Line services, emergency and disaster relief services,
ATM Cell Delivery and IP based Virtual Private Networks (VPN).
The SLA checklist covers topics such as, service descriptions, service level and
quality specification, service monitoring and reporting, service tariffs and service
billing issues. The seven high-level technology examples of applying SLA
principles and concepts can be complex in particular instances. The intent is to
retain only the essential aspects of the telecommunication services whilst
illustrating the use of the SLA Parameter Framework. The parameter values that
appear in Volume 3 are illustrative and not intended to represent industry
agreements or recommendations. Telecommunication services parameter values
are ultimately based on business enterprise needs and established within the SLA
negotiation process.

1.8.4 Volume 4 Enterprise Perspective


Volume 4 addresses the Customer business enterprise issues in the provision of
end-to-end SLA and is derived from a collaboration between The Open Group,
representing the business enterprise, and the TM Forum, representing
telecommunication SPs. The Open Group research indicates significant interest of
SLAs within the business enterprise but a large gap between where business
enterprises are considering embracing SLAs and where standards bodies, such as
the IETF, are currently concentrating their efforts. Volume 4 addresses the diverse
nature of business enterprises, business applications and the telecommunication
services parameters and metrics that could be applied, measured and reported on
in a contractual SLA.
To enable the transfer of business application information, a number of services
(voice, video conferencing, email, transaction processing and telemetry) and
networks (IP, Ethernet and DSL) need to be deployed, maintained and reported on
in order to support the business. It is the SLA that details the agreed service level
of these supporting business telecommunication services and networks. In some
cases a hierarchical or peer-to-peer relationship between these services that must
be considered.
To form a coherent telecommunication service view supporting business
enterprises the concept of Key Quality and Key Performance Indicators (KQI and
KPI) is used. The importance of the KQIs and KPIs is that it allows the SP to
concentrate on the quality rather than the performance of a service. From the

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enterprise perspective the mapping between the KQI and KPI forms an important
part of the SLA negotiation.
Volume 4 discusses the form of an SLA with special attention made between
internal and external parties, especially in terms of penalties. A monitored and
reporting process is discussed allowing for Real Time, near-Real Time and
historical reporting of both asynchronous events and polled parameters. A number
of use cases are considered to validate this approach.

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Chapter 2 - SLA Business Case

2.1 The Business Model


Information is the life-blood of corporate telecommunication end Customer, SP and
Supplier enterprise processes. It is therefore crucial that corporate business
information is properly understood in terms of importance, priority, security,
content, distribution, management and cost. To ignore business information
analysis could lead to significant loss of reputation, revenue, time, productivity and,
in the limit, could ultimately place the entire enterprise at risk of failure. It is
telecommunication services that enable enterprise information to be transferred to
wherever and whenever it is needed. It is telecommunication networks that enable
telecommunication services. It is SLAs that define the availability, reliability and
QoS performance of telecommunication services and networks.
Understanding business information is termed Information Management (IM).
Protecting business information is termed Information Assurance (IA). Adopting
appropriate IM and IA measures to enterprise information in the light of wellunderstood business processes, risks, threats and vulnerabilities can advert, or
lessen, the impact of business failure.
Networked services and systems have revolutionized business enterprises by
providing rapid access to information, cost-effective communications within the
organization and partners, improving customer services and relations and
opening-up the processes for e-business. Telecommunication services and
networks are therefore indispensable for conducting commercial, government and
academia business. However, service and network performance will only be to the
level permitted by the architecture design. This limitation may result in
telecommunication services and networks under performing against the desired
business enterprise requirement introducing business risks that may have far
reaching consequences to the survival of the enterprise, be it an end Customer,
Service Provider or Supplier. Therefore for enterprises to be assured of business
survival, business performance requirements must be accurately mapped into the
telecommunication services and networks QoS performance parameters, metrics
and thresholds detailed within the enterprise internal and external SLAs.
Ultimately, it is the CEO that is responsible for corporate enterprise IM, IA and the
telecommunication service requirements associated with meeting the enterprise
need. The business model can therefore be drawn from a combined consideration
of:

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The positioning of SLAs within a network centric service related provision


supporting end Customer enterprises;

The SLA contract balancing end Customer expectations against SP


capability, quality, performance and value for money;

The MVC incorporating all stakeholders (end Customers, SPs, Suppliers


and other Third Parties);

The CRM processes embedded within the TM Forum eTOM [TM Forum
GB 912] business relationship model.

2.1.1 Balance of Investment


In order for business enterprises to commit to SLAs there is a need to first be assured that
embracing SLAs will benefit the business enterprise. There is therefore a need for
enterprises to conduct a Balance of Investment (BoI). The SLA BoI needs to take into
account such factors as:

Benefits;

Consequences;

Whole Life and Unit Costs;

Improved Revenue;

SLA Steps;

Level of Service differentiation;

Quality of Service Performance.

2.2 Market Forces


2.2.1 General
As the telecommunications service marketplace becomes more competitive,
Customer business enterprises are become increasingly discerning and selective.
SPs are realising the need to differentiate their products through value added
services. Additionally industry deregulation is transforming a traditionally
monopolistic marketplace into an extremely competitive one.
Several emerging market forces place new emphasis on specifying performance in
SLAs:

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The opening up of the telecommunications market to competitive service


provision;

The explosion in e-business requiring very high levels of service availability


from external networks and associated services, such as servers and
databases;

Moves towards supporting services-driven Customers rather than networkdriven operators;

The development and deployment of services based on new network


technologies;

Improved monitoring, collection and reporting;

The need for improved Customer Relation Management (CRM).

2.2.2 Telecommunications Market Liberalization


The current widespread interest in SLAs reflects the changes taking place in the
telecommunication industry. The liberalization of the telecommunications market
has been an important event leading to change and competition. SLAs are one of
the responses to this newly competitive environment. The market is being opened
up, enabling a variety of SPs to enter and compete for Customers. New entrants
are striving to gain market share and establish themselves as viable SPs and
Suppliers. SLA commitments provide a means of attracting Customers. SPs can
establish credibility by committing to specified levels of service with compensation
or administrative responses if such SLA commitments are not met. Incumbent SPs
are improving their SLA offerings in response to new SP challenging offerings.

2.2.3 New Technology-Based Services


The rapid evolution of telecommunications-based applications is leading to the
introduction of new services enabled by new networking technologies at an
accelerating rate. As SLAs provide a commitment to specified performance levels,
they assist Customers to understand and use these new services and
technologies. The critical dependency between a constantly expanding set of
essential business activities and the availability of communication networks and
information services means that greater numbers of Customers are demanding
increasingly stringent service levels to ensure business continuity.

2.2.4 IT Departments
Many IT departments are being evaluated on the service levels they provide to
other business units within the enterprise. Consequently, IT managers are taking
steps to ensure that their communication infrastructure and staff can meet these
internal SLAs. IT managers and staff will typically use the SLA commitments from
their SPs when planning the growth and evolution of their own systems. SLAs are
also advantageous for smaller organizations that do not have an IT department

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and networking specialists as SLAs can give them the performance assurance
small business organizations require.

2.2.5 Customer Care Services


Competition in the liberalized telecommunications markets and the demands of
Customer enterprises using complex services are leading to a greater emphasis
on the provision of efficient Customer service. SLAs and performance
management contribute to determining how Customer care is perceived. Positive
Customer perception is critical to any business and good Customer relations and
the ability to meet commitments are arguably now more important than price as in
an increasingly competitive SP environment Customer retention is paramount.
This is especially true for Customers whose business success is dependent on
telecommunications services. SLAs are therefore now regarded as a crucial tool in
both attracting new Customers and maintaining loyalty from already existing
Customers. CRM goals, initiatives and support systems incorporating SLA
monitoring and reporting is therefore vital to SP, Customer and Supplier
enterprises alike.

2.2.6 SLA Unifying Concepts


The SPs involved in the service provision require a common understanding of
service quality guarantees and a consistent approach to SLA management in
order to support the commitments that they are providing for the services they
deliver.
All SPs seek new ways of distinguishing the quality of their services from those of
their competitors. The use of SLAs provides an excellent mechanism to achieve
this goal. However, due to the ad-hoc way SLAs have developed SPs continue to
experience difficulty in preparing and managing SLAs. This is exemplified in the
fact that there is no standard list of SLA terms to use when creating Customerspecific SLAs.

2.2.7 Service Driven SLAs


Many of the commonly used performance parameters focus on network and
network element performance rather than addressing the Customer need to focus
on services and service element performance. It is therefore important that SPs
and Suppliers acknowledge Customer business needs and begin to translate
network-related performance measures into service-related performance
measures that reflect Customer expectations.

2.2.8 Market Value Chain


As MVC become more complex, multiple SPs are involved in providing a service
or service bundle to end Customers. SLAs need to account for this MVC so that
end Customers can be provided with the required level of service. Consequently,
all SPs supporting a service require a common understanding of the service

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performance requirements and must follow a consistent approach to SLA


management in order to support the commitments to the end Customer.

2.2.9 Service Performance


Service performance is used by a SP to evaluate both technical performance as
well as Customer satisfaction. Determining service performance provides a
discriminator between the various types of service offered. Service performance
therefore leads to opportunities to balance the level of service quality offered
against price and Customer expectation.

2.2.10 Customer Satisfaction


The use of service performance agreements in SLAs provides SPs with the
opportunity to delight Customers, build stronger long-term relationships and brand
image, and maintain and grow market share.

2.2.11 Complexity
The growing complexity of global services brings together a myriad of services,
suppliers and technologies, all with potentially different service requirements. SPs
are trying to integrate these services into one Next Generation Network (NGN) that
supports these requirements whilst at the same time striking a balance between
cost and return on investment.

2.2.12 Improved Reporting


Government and Corporate Customers are seeking SLAs that offer more
extensive verification and analysis of the performance they are paying for. In
addition to the primary requirement for high availability, the ability to monitor on an
increasingly granular level is imperative for corporate and government Customers.
Examples of improved Corporate and Government customer reporting are:

Service access rates during emergency conditions;

The number of successfully delivered packets in a given period;

The amount of time a user was connected to a server;

Notification of what traffic type is using the most bandwidth;

Percentage of traffic going to specific sub-networks or servers.

2.2.13 Guarantees
The rapid evolution of the telecommunication market is leading to the introduction
of new services and new networking technologies in ever-shorter time scales.
SLAs can help encourage Customers to use advanced technologies and services

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as they provide a commitment from the SP to specified performance levels.


Increasing dependency on availability of networks and communication and
information services by critical business activities means that greater numbers of
Customers are looking for Guarantees to ensure they carry out their business
successfully.

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Chapter 3 - Benefits

3.1 Service Providers (SP)


In the context of this SLA Management Handbook, SP is a general term given to
Information and Communications SPs (ICSP), Network Operators (NO), Internet
SPs (ISP), Application SPs (ASP) and Content SPs (CSP). SP CEOs are
interested in those measures that improve the bottom line, retaining existing
customers, acquiring new customers and cost-effectively improving service quality.

3.1.1 Customer Retention


Customer retention is vital to SP business enterprises. SP bottom line costs are
much less for retaining customers than for acquiring new customers. Customers
will seek a new SP if either the service provision is below expected quality or is too
expensive and can be procured from elsewhere at reduced cost.
A customer business enterprise can only remain in business by selling a product
be it knowledge, hardware or software. Customer enterprises also need to make
sure that their important information or product line is protected from competitors,
hackers and disruption. If service provision quality is degraded in any way such
that customer enterprise core business is affected then customer enterprises will
quickly seek service provision from another SP.

3.1.2 Understanding Business Requirements


The only true way to ensure SPs understand Customer enterprise important
information and key product lines is to develop the SLA negotiation process. When
the customer enterprise clearly states business requirements in pure business
terms, it helps the SP meet the real business needs and to establish correct
expectations. For example, the business need for a city bank must include
availability and error free delivery at specific times in the day. By being aware of
these service requirements at specific times of the day the SP is able to map
resilience into availability calculations for configuration design considerations
throughout the specified error free delivery periods.

3.1.3 Acquiring New Customers


Acquiring new customers is a relatively expensive bottom line activity for SPs. The
way new Customers are attracted to a new SP is if there is a perceived increase in
QoS performance or value for money. Establishing SLAs to demonstrate cost-

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effective QoS performance is a powerful marketing tool to attract new customers.


SLA service parameter metric statistics are also very useful to show customers
dissatisfied with their current SP how improvements can be made by changing to
another SP.

3.1.4 Performance Expectations


Clear performance expectations is the single SP activity that significantly reduces
customer churn and reduces operational staff involvement in dealing and solving
customer problems and complaints. Clear performance expectations is a pillar of a
well-negotiated SLA.

3.1.5 Resource Utilization


By truly understanding customer telecommunication service requirements through
a well-negotiated SLA process enables equipment and staff resource savings and
improved resource utilization in meeting the SLA demands of other customers.

3.1.6 Differentiates SPs


SPs are able to differentiate themselves from competitors by offering priced
options for multiple SLA Levels of Service (LoS). The quality of delivered Bronze,
Silver, Gold and Platinum LoS may differ markedly from one SP to another.

3.1.7 Introduce Operational Changes


SLAs are a useful tool to assist SPs in introducing operational changes as the SLA
processes are able to capture the exact performance and its measures in order to
specify the implementation of system(s) required.

3.1.8 Improve Internal Measurements


Offering good quality SLAs is a cost-effective way of ensuring SP internal service
and OSS measurement processes are maintained to a high standard.

3.1.9 Improved Customer Reporting


A key element of customer retention is to provide SLA reports that are both
informative and analytical. In this way Customers are able see ways of improving
their business by either seeking new telecommunication service products or
making configuration changes resulting in improved SP business.

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3.1.10 Enrich Customer Relations


Well-negotiated SLAs enriches Customer relations such that confidence and trust
becomes well established. The Customer will be retained, seek new business and
undoubtedly spread the word of the SP qualities.

3.1.11 Summary
In summary, Telecommunication SP benefits resulting from a consistent approach
to SLA management include:

Introduce operational changes, improve internal measurements


and reporting, enrich Customer relations and differentiate SPs from
competitors.

Create more knowledgeable Customers able to express their needs


better to SPs thus reducing negotiating process time and effort.

Create a common language and understanding with the Customer


on characterizing network, service and operational parameters.

Create SP internal recognition of Customer expectations perception


of network errors and service interruptions.

Prioritize service improvement opportunities.

Create common SLA and QoS goals across multiple technology


domains.

Standardize performance-gathering
internal domains.

practices

across

multiple

These SP benefits are explained further within volume 2

3.2 Enterprise Customers


It is Customer business enterprise that keeps telecommunication, other service
providers and to some extent supplier enterprises in business. It is the Customer
enterprise service requirements that drive the need for supporting
telecommunication services. Business telecommunication services need to be
cost-effectively delivered to the right people, in the right place, at the right time and
to the required QoS in an efficient and often secure manner otherwise, in the
extreme, the business may fail.
In this era of intelligent business enterprise customers who have high expectations
and do not easily tolerate failure, Customers are far more discerning than hitherto
and are quite content to change SP provided there is demonstrable business
benefit either through improved telecommunication service quality or cost
effectiveness.

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The Customer view is therefore a BoI between having customized attention with
the attendant high cost or standard SP LoS offerings with possible lower costs.
SLAs assist Customer business enterprises in negotiating a contract that satisfies
their business application requirements and understanding the possibilities,
limitations and expectations related to performance and cost of service.

3.2.1 Business Information and Requirements


Information is the life-blood of corporate business enterprise processes. It is
therefore crucial that corporate business information is properly understood in
terms of importance, priority, security, content, distribution, management and cost.
Establishing a clear understanding of the important business information and
products line is the basis for well-negotiated SLAs and can only serve to improve
both the end Customer and SP enterprise business.

3.2.2 Qualify SPs


SLAs provide a uniform specification for performance to help end Customers
qualify SPs. The approach is to focus on delivered telecommunication services
QoS performance from SPs to compare like for like costs.

3.2.3 Selecting Services


Well-negotiated SLAs simplify the selection of telecommunications services to
meet business needs based on quality, reliability, performance and cost.

3.2.4 Verification and Validation


SLAs provide a definition of measurable performance allowing verification and
validation that the QoS performance of purchased telecommunication services is
delivered.

3.2.5 Negotiations
Well-negotiated SLAs enable SPs to better map telecommunication services with
stated business needs and requirements.

3.2.6 Security Management


Well-negotiated SLAs enable SPs to better understand why Customer business
enterprises require information to be protected. Security Management is oft
omitted during SLA discussions to the detriment of the business. Security spans
an extremely broad range of capabilities and the SLA provides an important
placeholder to define mutual responsibilities and expectations.

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3.2.7 Expectations
Well-negotiated SLAs provide a structured framework by which Customer
business enterprise telecommunication services requirement expectations can be
better managed.

3.2.8 Summary
In summary, Customer enterprise benefits resulting from a consistent approach to
SLA management include:

Develop the baseline, establish requirements, customize contracts,


validate ongoing performance compliance for end-to-end service
level objectives and refine through iterative processes.

Establish parameters,
exception handling.

Define high-level common terms and definitions for end-to-end


service performance in the form of network technology-independent
QoS metrics, parameters and reports.

Evaluate the relationship between technology-specific service and


network elements and the technology-independent service
parameters. This includes considering how, within each of the
multiple SP administrative domains, these parameters map,
interpret or mimic the performance perceived by the Customer.

Validate QoS from predefined and exception reports, including


violation notifications, developing capacity concerns, changes in
usage patterns, delivered performance and perceived performance.

Evaluate degraded service performance and the business impact.

Verification of penalty provisions for failure to maintain and deliver


services.

Definition of end-to-end QoS metrics for multimedia


telecommunication services, especially those carried over IP-based
networks.

Compare services and service quality levels offered by different


SPs.

measurement

methods,

reports

and

Customer enterprise benefits are explained further within Volume 4

3.3 Hardware and Software Suppliers


As telecommunication SPs and Customer enterprises create uniform cost-effective
SLA Management solutions, hardware and software supplier will be able to gain an
insight as to what hardware and software products and service solutions are
needed to satisfy SLA Management requirements.

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3.3.1 Performance Parameters


A key element of any SLA are the processes in place to measure and report on
specified service parameter metric levels and thresholds. The outcome of this is for
hardware and software suppliers to design and market products that meet the
needs of both SPs and Customers to measure, monitor and report SLA parameter
metrics levels and thresholds.

3.3.2 Reports
Enterprise customers now require improved reports incorporating analyses of
reported metrics and thresholds that recommend cost-effective improvements to
improve the bottom line. There is a clear opportunity for hardware and software
suppliers to provide products that improve the quality of reporting to meet the everdemanding needs of both SP and Customer enterprises.

3.3.3 Summary
In summary, hardware and software supplier enterprise benefits resulting from a
consistent approach to SLA management include:

Understanding SP and Customer SLA business needs and


requirements.

Assist in the mapping of technology-specific parameters and


measurement methods into service-specific parameters and
measurement methods.

Assist software vendors agree on common interface definitions for


SLA management.

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Chapter 4 - Consequences

4.1 Introduction
Good SLA Management does not come without a price. For SPs, end Customers
and suppliers alike, it is important to involve all departments within the enterprise
organization in the SLA negotiation phase to ensure all business attributes from
product delivery to marketing to finance are adequately covered and addressed.
All these departments will have views and expertise to add to what ought to be
included within well-negotiated SLAs. SLA negotiations are not conducted
overnight and often take many months to reach a successful conclusion.

4.2 Service Provider (SP)


4.2.1 Better Understanding of end Customer Drivers
SPs need to properly understand end Customer business drivers to ensure the
right service and network product(s) and associated LoS and QoS performance is
cost-effectively available to support end Customer businesses. Understanding end
Customer business drivers and information content should not be underestimated,
particularly for large corporations.
SPs may need to create dedicated teams embedded within end Customer
locations for short periods to better understand end Customer service and network
LoS and QoS performance needs. There may well be a significant discrepancy
between end Customer initial service requirements and initial SP offering. This
discrepancy needs to narrow to the advantage of both the end Customer and SP.
For too long SPs have not been willing to taylor their service and network products
to meet the business imperatives of end Customers. Although an improved
understanding of end Customer business needs is seen as a SLA consequence,
in the longer term it should be regarded as a benefit. The reason for this is that
costs can be recovered provided there is significant bottom line end Customer
business improvement resulting from improved service and network performance.
Also, the lessons learned from a better understanding of end customer business
drivers can be transferred onto other end Customers.

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Training
Adopting a greater emphasis to end Customer service and network LoS and QoS
performance needs may require a change of attitude throughout all SP
departments, from Finance and Legal to Engineering and CRM. This change in
attitude may also require the introduction of a training regime to ensure the SP as
a corporate organization understands this change of emphasis and is responsive
to supporting the end Customer.

4.2.3 System Re-engineering


For SPs to better support end Customer service and network LoS and QoS
performance needs it may be necessary for SPs to engineer changes to
telecommunication systems. This re-engineering of systems is required to ensure
end Customer LoS and QoS performance parameter needs are both available and
measurable for incorporation into management reporting.

4.2.4 Open Management Interfaces


Cost-effective delivery of services and network LoS and QoS performance
requires open management interfaces with other SPs within the delivery value
chain, end Customer enterprises and suppliers. The development of open
management interfaces may require at best minor application changes to current
OSS and BSS or at worst the introduction of new OSS or BSS.

4.2.5 Service and Network Product Documentation


The introduction of revised or new service and network products to meet end
Customer LoS and QoS performance requirements may require an evaluation of
current service and network products whole life costs and per unit value. A whole
life product set cost evaluation will require an analysis of all pertinent document
information. This documentation may well be outdated and requires to be updated
to reflect recent or older product set changes.

4.3 End Customer Enterprises


4.3.1 Business Information
It is important for end Customers to be extremely clear as to what is important
business information, what type of services are required to support the
business, what information requires to be protected and what is affordable. It
is therefore crucial that corporate business information is properly understood
in terms of importance, priority, security, content, distribution, management
and cost. This business information analysis activity should not be

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underestimated and unless conducted rigorously could place the business at


risk.

4.3.2 SLA Negotiation


It is important that the end Customer takes a full and active role in the SLA
negotiation phase. Without the full cooperation and participation of the end
Customer in the SLA negotiation phase, there is risk that the delivered service
and network LoS and QoS performance will not meet the business aims and
objectives.
The SLA negotiation phase may be protracted to reach a successful
conclusion involving significant numbers of staff. This manpower cost can be
considerable and needs to be taken into account.

4.3.3 SLA Management


SLA Management is not the sole responsibility of the SP. The end Customer
has a responsibility to ensure sufficient enterprise SLA CRM interface
resource is available for staff presence as well as hardware and software
monitoring tools. It is important for the end Customer to be proactive in SLA
Management which ultimately will ensure improved and sustained delivery
performance.

4.3.4 SP OSS and BSS Integration


In order to ensure end Customer and SP coherence in the cost-effective
delivery of services and network LoS and QoS performance it may be
necessary to integrate end Customer OSS and BSS with SP OSS and BSS.
OSS and BSS integration is best effected by open management interfaces.
Open management interface tools may need to be procured, or may be rented
or loaned from the SP in the interest of improved performance through greater
Customer and SP integration.

4.3.5 Training
For SPs to deliver the required service LoS and QoS performance, it is first
necessary for end Customers to be able to define performance requirements. To
define end customer service performance requirements may require an
understanding of business enterprise information content, affordability and, to
some extent, technology capabilities. To gain an understanding of business
information content, affordability, technology capabilities and the implications of
SLA Management end Customer organizations may need to undertake staff and
management training.

4.3.6 Internal Systems Design


The SP is only responsible for delivery of services and network to the required LoS
and QoS performance levels from agreed Service Delivery Point (SDP) or Primary
Service Access Point (SAP) to agreed SDP/SAP. The required LoS and QoS
performance levels may degrade within end Customer premises for which the SP

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has no responsibility. It is therefore crucial that end Customer organizations


conduct an internal services, systems and networks engineering survey to ensure
there is no performance degradation within the end Customer organization that
lowers the overall end-to-end performance levels.

4.3.7 Industry Participation Forums


To understand what is realistically achievable from service and network
performance levels to support end Customer businesses, it may be useful to
participate within industry forums. Possibly the most appropriate end customer
industry forum is The Open Group. The Open Group specializes in detailing end
Customer enterprise SLA LoS and QoS performance levels.

4.4 Hardware and Software Suppliers


4.4.1 Understanding Customer and SP Business Processes
For suppliers to add value to the market value chain, it is important to be clear
as to the important business processes that support Customer and SP product
lines. Understanding product line business process analysis and modeling
should not be underestimated as it is this activity that is the life-blood of
hardware and software BSS and OSS suppliers to develop new products.

4.4.2 SP OSS and BSS Integration


Hardware and software BSS and OSS suppliers must be alert to the needs of
end Customer and SP for open management interfaces. Although open
management interfaces may necessitate changes to supplier product lines, in
the longer term this should result in increased revenues.

4.4.3 Industry Forum Participation


For suppliers to understand how best they can support end Customers and SPs it
may be appropriate to participate within industry forums. Possibly the most
appropriate end Customer and SP industry forums are The Open Group and the
TeleManagement Forum (TM Forum). Participation in these groups will not only
improve supplier understanding of the BSS and OSS support market but also go
some way to improve BSS and OSS standardization.

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Chapter 5 - Next Steps

5.1 Immediate
5.1.1 CEO Question Phase
Having read this Executive Summary to the TM Forum SLA Management
Handbook Version 2 Board-level members for end Customer, SP and supplier
organizations need to pause for thought and ask pertinent questions.
As an end Customer enterprise CEO the main question must be related to
business product information content. Do I know what information is vital, crucial,
important as well as not important to the survival of the business? Do I know the
extent, protection, precedence, LoS and QoS costs associated with these
information classification categories.
As a SP enterprise CEO questions may be related to end Customers
understanding the importance of their product line information traffic, adequate
information protection and is information treated with the correct LoS and QoS
performance parameter metrics and threshold levels. Are there added value
measures that can be offered to end Customers to improve business growth, such
as, proactive reporting, implementing dynamic SLAs and improved QoS
performance.
As a supplier CEO the main question must be related to end Customer and SP
product line business processes validation.

5.1.2 SLA Implications


Accepting that there are important questions to be answered, the immediate next
step is for CEOs to direct Chief Technical Officers (CTO) towards the SLA
Management Handbook Volumes 2, 3 and 4 as appropriate. The SLA
Management Handbook provides direction for implementing the SLA management
processes from system design through procurement and execution to
decommissioning. A review of the SLA Management Handbook will reveal the
implications of adopting SLAs as a key component of business growth.
The Handbook is a useful guide for the business management team to use in
order to identify both benefits and consequences of adopting SLAs consistent with
enterprise business strategy. The handbook also provides frameworks for

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implementation of processes and measures to support management of LoS and


QoS performance affordability.

5.1.3 Gap Analysis


A further next step is to see how SLAs could benefit the business enterprise in
terms of business strategy, positioning, risk analysis, processes, management as
well as hardware and software solutions.

5.1.4 Cost-Benefit Analysis


Having identified that adopting SLAs as a business strategy may benefit the
business it is important to understand the profitability implication. Profitability is
best effected by conducting a cost-benefit analysis. Some suggested topics for
inclusion in a cost-benefit analysis are included in section 3.1.1 above however,
this list is not intended to be all inclusive.

5.2 Areas For Review


5.2.1 Current Services and SLAs
Following a decision to accept that SLAs may be of benefit to the business
organization a useful next step is to examine all current telecommunication
services SLAs already in place and the applicable LoS and QoS performance
levels.
Identified already existing SLAs should then be validated against the business
aims, objectives, information content analysis and required business application
LoS and QoS performance levels. The SLAs can also be validated against the
Handbook parameter framework. This validation exercise will undoubtedly give
rise to LoS and QoS discrepancies that will need to be remedied. Remedies may
be either adjusting existing SLAs to the business performance level required or to
begin negotiation for new SLAs to meet the actual business need.

5.2.2 Strategic Business Plans


Since the increased use of telecommunication services, systems and networks is
core to all business it is vital to ensure that business strategies are in line with
affordable improved performance quality including reliability and capacity. Not
delivering a quality product or service impacts on the entire organization

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5.2.3 Roles and Responsibilities


End Customer, SPs and supplier business enterprises that have implemented or
intend to implement SLAs have roles and responsibilities. These roles and
responsibilities are associated with either business analysis or the management
and practitioning of delivering cost-effective services, systems and networks to
meet the business needs.
Enterprises could therefore give further consideration to, inter alia:

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Training Needs Analysis (TNA);

Service Billing;

Operational Readiness;

Service, System and Network Capability;

Operational Functionality;

Business and Operational Management;

Internal and External CRM;

Future Service Plans;

Marketing Strategies;

Outsourcing Strategies.

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References
[GB 910]
Telecom Operations Map (TOM), GB 910, Approved Version 2.1,
TeleManagement Forum, Morristown, NJ, March 2000.
[GB 917-2]
SLA Management Handbook Concepts and Principles, GB917-2,
Version 2.0, TeleManagement Forum, Morristown, NJ, April 2004.
[GB 917-3]
SLA Management Handbook Service and Technology
Examples, GB917-3, Version 2.0, TeleManagement Forum, Morristown, NJ, June
2004.
[GB 917-4]
SLA Management Handbook Enterprise Perspective GB917-4,
Version 2.0, The Open Group, 2004.
[GB 921]
enhanced Telecom Operations Map (e-TOM) GB921, Approved
Version 3.0, TeleManagement Forum, Morristown, NJ, June 2002.
[GETS]
Government Emergency Telecommunications Service (GETS)
Program, www.ncs.gov/n2/default.htm.
[NMF 503]
Service Provider To Customer Performance Reporting Business
Agreement, NMF 503, Issue 1.0, TeleManagement Forum, Morristown, NJ, March
1997.
[TMF 044]
2003.

TM Forum Glossary, TMF 044, Public Version, Version 0.2, March,

[TMF 506]
Service Quality Management Business Agreement, TMF 506,
Evaluation Version Issue 1.5, TeleManagement Forum, Morristown, NJ, May
2001.
[TMF 701]
Performance Reporting Concepts & Definitions Document, TMF
701, Version 2.0, TeleManagement Forum, Morristown, NJ, November 2001.

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Acronyms
ASP
ATM
BoI
BSS
CEO
CRM
CSP
CTO
DSL
eTOM
GoS
IA
ICSP
IETF
IM
IP
ISDN
ISP
IT
ITU
KPI
KQI
LoS
MVC
NGN
NGOSS
NO
NP
OSS
QoE
QoP
QoS
SAP
SDP
SLA
SLG
SP
TM Forum
TMN
TNA
TOM
VPN

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Application Service Provider


Asynchronous Transfer Mode
Balance of Investment
Business Support Systems
Chief Executive Officer
Customer Relations Management
Content Service Provider
Chief Technical Officer
Digital Subscriber Line
Enhanced Telecommunications Operations Map
Grade of Service
Information Assurance
Information and Communications Service Provider
Internet Engineering Task Force
Information Management
Internet Protocol
Integrated services Digital Network
Internet Service Provider
Information Technology
International Telecommunications Union
Key Performance Indicator
Key Quality Indicator
Level of Service
Market Value Chain
Next Generation Network
New Generation Operational Systems Software
Network Operator
Network Performance
Operational Support System
Quality of Experience
Quality of Performance
Quality of Service
Service Access Point
Service Delivery Point
Service Level Agreement
Service Level Guarantee
Service Provider
TeleManagement Forum
Telecommunications Management Network
Training Needs Analysis
Telecommunications Operations Map
Virtual Private Network

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Annex A: Executive Summary Volume 2 Concepts


and Principles
The Service Level Agreement (SLA) Management Handbook series consists of
four volumes. These are Volume 1, Executive Overview, Volume 2, Concepts and
Principles, Volume 3, Applications and Examples and Volume 4, Enterprise
Perspective. The series has a common conceptual base with each volume
concentrating on specific topics. The volumes may be read in any order although it
is suggested that Volumes 2 and 4 be read before Volume 3. It is expected that
the readers of Volume 1 are interested in an overview of the SLA Management
process that is sufficient to enable them to provide management guidance to their
organizations. For reader convenience, the Executive Summaries for Volumes 1,
2, and 4 are in the Annexes to this document.
The objective of the SLA Management Handbook series is to assist two parties in
developing a Service Level Agreement (SLA) by providing a practical view of the
fundamental issues. The parties may be an end Customer, i.e., an Enterprise,
and a Service Provider (SP) or two Service Providers. In the latter case one
Service Provider acts as a Customer buying services from the other Service
Provider. For example, one provider may supply network operations services to
the provider that supplies leased line services to its customers. These relationships
are described as the Customer-SP interface and the SP-SP interface.
The perspective of the SLA Management Handbook series is that the end
Customer, i.e., an Enterprise, develops its telecommunication service
requirements based on its Business Applications. These requirements are
presented to a Service Provider and the two parties begin negotiating the specific
set of SLA parameters and parameter values that best serves both parties. For the
SP, the agreed-upon SLA requirements flow down through its organization and
become the basis for its internal management and control of its Quality of Service
(QoS) processes. For the Enterprise Customers, the SLA requirements serve as a
foundation or a component of its internal network services or business services.
This volume of the Handbook contains two tools that provide the foundation for
clarifying management roles, processes, responsibilities and expectations. These
are the Life Cycle of the Service and the SLA Parameter Framework.
A service and its associated SLA are divided into six Life Cycle Stages to clarify
the roles of the Customer and the SP. The six Life Cycle Stages are as follows:
product/service development, negotiation and sales, implementation, execution,
assessment and decommissioning. Each life cycle stage addresses specific
operations processes in the enhanced Telecom Operations Map (eTOM) [GB
912]. The SLA Life Cycle provides a complete process description by delineating
interactions between well-defined stages.

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Many performance parameters exist that have similar names yet have drastically
different definitions. The SLA Parameter Framework is a useful tool for
categorizing parameters. The framework organizes SLA parameters into six
categories based upon service and delivery technology and upon measures of
individual instance and average performance. The specification of specific values
for service performance parameters is part of a specific contract negotiation and is
beyond the scope of the Handbook.
The SLA Management Handbook series incorporate earlier work that appears in
the Performance Reporting Concepts and Definitions Document [TMF 701], in the
Service Provider to Customer Performance Reporting Business Agreement [NMF
503] and in Service Quality Management Business Agreement [TMF506].

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Annex B: Executive Summary Volume 3 Service and


Technology Examples
The Service Level Agreement (SLA) Management Handbook series consists of
four volumes. These are Volume 1, Executive Overview, Volume 2, Concepts And
Principles, Volume 3, Service And Technology Examples and Volume 4,
Enterprise Perspective. The series has a common conceptual base with each
volume concentrating on specific topics. The volumes may be read in any order
although it is suggested that Volumes 2 and 4 be read before Volume 3. It is
expected that the readers of Volume 1 are interested in an overview of the SLA
Management process that is sufficient to enable them to provide management
guidance to their organizations. For reader convenience, the Executive Summaries
for Volumes 1, 2, and 4 are in the Annexes to this document.
The objective of the SLA Management Handbook series is to assist two parties in
developing a Service Level Agreement (SLA) by providing a practical view of the
fundamental issues. The parties may be an end Customer, i.e., an Enterprise,
and a Service Provider (SP) or two Service Providers. In the latter case one
Service Provider acts as a Customer buying services from the other Service
Provider. For example, one provider may supply network operations services to
the provider that supplies leased line services to its customers. These relationships
are described as the Customer-SP interface and the SP-SP interface.
This volume of the Handbook briefly reviews the essential elements of the
concepts and principles presented in Volume 2. Using this as a base, a check list
of items for potential inclusion in SLAs is presented. This then followed by seven
examples of the application of the SLA concepts and principles.
The SLA check list contains numerous lists of items that may be included in an
SLA. These lists were derived from TMF member contributions, information
provided by user groups and by standardization bodies. Not all of these items will
be relevant to a specific SLA. The order of the items in the list does not imply a
priority. These items may be consolidated or may be disaggregated as needed.
Topics covered include service descriptions, service level and service quality
specification, service monitoring and reporting, and tariffs and billing issues.
This volume concludes with high level examples of how the principles and
concepts defined in Volume 2 can be applied. It should be noted that the services
used in the examples can become quite complex in particular instances. The
intent in this document is to retain only the essential aspects of the services while
illustrating the use of the SLA Parameter Framework.
Note that all parameter values that appear in this document are for illustrative
purposes only and are not intended to represent industry agreements or

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recommendations. Service parameter values are ultimately based on business


needs and will be established via the SLA negotiation process.
The examples herein include lease line services, emergency and disaster relief
services, ATM Cell Delivery and IP based virtual private networks (VPN).
The SLA Management Handbook series incorporate earlier work that appears in
the Performance Reporting Concepts and Definitions Document [TMF 701], in the
Service Provider to Customer Performance Reporting Business Agreement [NMF
503] and in Service Quality Management Business Agreement [TMF506].

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Annex C: Executive Summary Volume 4 Enterprise


Perspective
This volume addresses the enterprise issues in the provision of end-to-end Service
Level Agreements (SLA) and comes as a collaboration between the Open Group,
representing the enterprise, and the Telemanagement Forum, addressing the
service provider markets. This work was further inspired by survey data gathered
on behalf of the Open Group by Sage Research which indicated great interest in
SLAs in the enterprise but a large gap between where enterprises are considering
SLAs and where standards bodies, such as the IETF, are currently concentrating
their efforts.
The scope of the market addressed by enterprise is very broad and business
practices diverse. It was therefore necessary generalize the applications used by
an enterprise that SLA metrics could be applied, measured and reported in a
contractual manner.
In the attempt to describe enterprises generically, an application is considered as a
collection of applications that fulfill the enterprise objectives. Such objectives would
include raising revenue (commercial), giving taxes (government), curing patients
(healthcare) and defending a nation (operational defense). In support of these
objectives the enterprise needs to deploy a number of business applications.
These applications would include call center, trading, information delivery,
manufacture, distribution etc.
To enable the business applications, a number of business services, e.g., voice,
video conferencing, email, transaction processing and telemetry and network
services (IP, Ethernet, DSL etc.) need to be deployed to an agreed level (the
service level), maintained and reported. There is some cases a hierarchical or peer
to peer relationship between these services that must be considered.
This work uses the concept of key quality and performance indicators (KQI/KPI)
developed by the TMF Wireless Services Measurement Handbook (GB 923). The
importance of the KQI/KPI concept is that it allows the provider of the service to
concentrate on the quality, rather than the performance of a service as in the past.
The relationship between the KQI and the performance metrics, KPI could be
identical for the simple case or complex, derived empirically or inferred from a
number of KPI and other data. The mapping between the KQI and KPI forms an
important part of the SLA negotiation.
For each of the generic business services discussed, the KQI are determined and
then KPI for the services and methods tabulated.
The form of an SLA is discussed and special attention is made between the form
of an SLA between internal parties and external parties, especially in terms of

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penalties. A monitored and reporting process is then discussed allowing for real
time, near real time and historical reporting of both asynchronous events and
polled parameters.
A number of use cases are considered to validate the approach. The first is a
common example where Voice over IP (VoIP) is used to connect remote sites of
an enterprise to a corporate HQ. Data is also supported but only on a best effort
basis. The second scenario is from the Open Groups Mobile Management
Forums work on the Executive on the Move where an executive is considered to
have voice and data connectivity wherever they are, in the office, in transit (car,
airplane), at home or at a remote site. Voice, data and video (conferencing) are
also supported for the executive. The final scenario is a naval application where
voice, data and video applications are supported in a highly distributed and
arduous environments. The VoIP and naval scenarios envisage a common IP
infrastructure and uses a differentiated services (DiffServ) marking scheme to
separate the different service domains for prioritization.

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