Press Releases : 2005

Oblicore Survey Shows More SLAs and Outsourcing on the Horizon

Research Finds 90 percent of IT Professionals Claim Improving Service Level Management is Important; Many Still Over- or Under-provisioning Services

COLUMBIA, Md. September 6, 2005 - Oblicore, Inc., a leading provider of service level management (SLM) applications that provide the fastest path to guaranteed service delivery, today announced findings from its third annual survey and report “Trends in the Use and Management of Service Level Agreements (SLAs).” The results, based on nearly 400 respondents, of which 53 percent were service providers and 47 percent were enterprises, provide insight into the challenges of meeting service delivery commitments and complying with SLAs.

Of the service providers responding to the survey, 42 percent admitted they do not meet their SLAs at a rate of 90-99 percent of the time. When considering a 10 percent failure rate in meeting SLAs of critical services such as disaster recovery, electronic health records and banking applications, this represents a potentially costly problem. In addition, nearly half of the enterprise IT professionals responding saw failure to meet internal SLAs as a precursor to internal IT functions being outsourced. Respondents from both sectors noted that the volume of SLAs they face have grown and will continue to grow rapidly over the next 12 months.

Whether in the context of outsourcing, shared services, high-value business processes or new product offerings, ensuring the compliance of SLAs has become a critical business imperative and challenge. In fact, nearly half of participating enterprises recognized problems complying with their SLAs. Additional notable findings include:

• More SLAs than Ever—74 percent of service provider respondents claim they are managing more SLAs than ever before. 81 percent of service providers and 70 percent of enterprises expect the number to keep growing over the next year.
• Outsourcing Future for Enterprises—Nearly 90 percent of enterprises have SLAs with internal departments. In addition, 42 percent are seeing problems complying with their SLAs likely resulting in the outsourcing of part or all of their IT functions.
• Meeting SLAs Comes at a Price—55 percent of service providers and 42 percent of enterprises claim they over-deliver or over-provision services to comply with SLAs.
  • For the 88 percent of service providers with SLAs that impose penalties, 24 percent claim penalties are imposed frequently or some of the time. More telling is the fact that 33 percent claim service delivery problems are impacting customer retention and acquisition.
  • For 33 percent of enterprises, service delivery problems are reducing financial and operational performance with 66 percent claiming lost productivity, 42 percent with increased labor costs and 61 percent with increased downtime.
• Automation is Lagging—Nearly 30 percent of service providers use spread sheets and manual processes to conduct SLM; 59 percent use internally developed reporting tools, and 12 percent use commercial SLA management applications.
  • When it comes to SLM headcount, 36 percent of service providers have more than 20 people dedicated to managing SLAs.
  • 57 percent of enterprises find the effort of proactively monitoring SLAs is more time consuming and complex than expected.

“This survey underscores the increasing importance and growing number of service level agreements that are challenging companies’ abilities to manage and comply with their service delivery requirements,” said Steve Piper, senior director of product marketing at Oblicore. “Although the adoption of SLAs and service management processes like ITIL (IT Infrastructure Library) is increasing, most organizations are clamoring for more efficient and proactive ways to guarantee service delivery. Oblicore will continue to provide these companies with the most integrated and complete technologies to ensure their services are compliant, consistent and cost effective.”

To gain access to the September 2005 “Trends in the Use and Management of Service Level Agreements” report, please visit www.oblicore.com.

About Oblicore

Oblicore provides the fastest path to guaranteed service delivery. Dozens of blue-chip service providers and enterprises worldwide use Oblicore to reduce the cost of service delivery, achieve compliance, increase customer retention and acquisition, and monitor critical business processes. Architected to provide business-focused, top-down service level management, Oblicore delivers the most complete and integrated software as well as world-class best practices and expertise, facilitating guaranteed service delivery in record time. Headquartered in Columbia, Md., with offices across the US, Europe and Israel, Oblicore is backed by a strong, global investor base. For more information, please visit www.oblicore.com.