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Service Level Agreements

Why Service Level Agreements are Dead | Sherpas in Blue Shirts

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Service-level agreement (SLA) contracts can drive the wrong business outcomes. Some technology leaders want to move away from those SLA-driven contracts.

If you’re like many CIOs, the chances are your company compensates third-party IT service providers for something they didn’t do or pays them twice for something. Technology leader Nipa Chakravarti realized that’s what was happening at TransAlta (Canada’s largest publicly traded power generator and provider of renewable energy). I recently talked with Nipa, and she made an interesting comment: “I want to move away from SLA-driven contracts.”

As Nipa explained in a prior blog post, she successfully restructured TransAlta’s IT group to be more responsive to business needs, doing the things that the business users care about and doing them in a reasonable time frame and cost point. As detailed in that blog, she dramatically changed the value equation for IT at the company, making it much more cost-effective, achieving results much faster and at the same time delivering higher quality and more reliable work. That’s quite a formidable set of accomplishments. So it’s worth paying attention to her strategies for taking the organization to the next level.

Read more at CIO online.