Press Releases : 2007

Study Reveals Organizations Increasingly Require SLA Management but Lack Effective Process and Tools

Oblicore Releases 2007 Service Level Management Survey

CAMBRIDGE, Mass., June 25, 2007 - Oblicore, a leading provider of Service Level Management software and best practices, today announced the results of its 2007 Service Level Management Survey. According to the survey results, Service Level Management, once thought of as the domain of Early Adopter companies, has become prevalent with mainstream companies as well. However, companies are primarily monitoring and managing these agreements manually.

The survey is based on 832 responses to a web-based questionnaire. Respondents represented a broad range of industries and company sizes. Key research findings include:

• Organizational use of service delivery agreements for managing suppliers, internal agreements, and external customer agreements is ubiquitous (91 percent of organizations); however, internal usage of this function has grown significantly with 84 percent using SLAs for managing internal operations (up from 60 percent in 2005) and 88 percent using SLAs for managing outsourced business and IT processes (up from 57 percent). Companies have seen growth in the usage of service delivery agreements over the past 12 months. This increase has been most prominent in the use of service delivery agreements for managing outsourced services and internal operations. Respondents anticipate even higher growth in company usage of service delivery agreements in the next twelve months. Again, this trend is most prominent in service delivery agreements to manage outsourced services for internal operations.
• "Companies are responding to the increasing volume and usage cases of service delivery agreements by manually monitoring and managing these agreements. In fact, using manual processes to manage SLAs has risen sharply (29 percent to 45 percent) since 2005. These manual processes are clearly ineffective for most companies. While companies rate "the need to understand the business impact of service delivery" and "the need to improve Service Level Management" as the most important drivers of Service Level Management (52 percent and 43 percent respectively rate as "very important"), they simultaneously rate the company's effectiveness at managing these processes very low (only 13 percent and 9 percent as "very effective"). This focus on manual processes is labor intensive as companies have generally increased the number of SLA management personnel (4 percent with 10 or more dedicated personnel in 2005 to 31 percent in 2007).
• As a potential external driver, use of the IT Infrastructure Library (ITIL) as a potential service delivery framework has risen sharply (46 percent in 2005, 87 percent in 2007).
• There is a significant perception gap between service providers and service consumers with 66 percent of suppliers indicating that they meet agreed upon service delivery agreements more than 90 percent of the time but with only 40 percent of service consumers indicating that they receive services at this level.
• "With over three-fourths of companies (77 percent) outsourcing, either IT, or business services, use of this business solution remains common. As indicated above, service performance is seen to be lacking for outsourced processes; moreover, 63 percent of companies indicate that when outsourcing relationships fail to meet service level objectives, there are tangible financial implications to the company (reduced productivity - 59 percent, increased downtime - 57 percent, increased labor costs - 29 percent, incurred financial expense - 30 percent).

According to Oblicore Director of Product Marketing, Erik Hille, "This discrepancy between the usage of service level agreements and companies' inability to manage them effectively is nothing short of shocking. When you factor in the expected growth rate that these same companies expect in this process, it is clear that companies who invest in Service Level Management will have a significant strategic advantage over those that try to manage this process manually."

“Unless companies face up to these challenges, there is a real danger they will lose out to more operationally efficient competitors,” adds Hille.

Note to Editors

Copies of The 2007 Service Level Management Survey research report may be downloaded from the “Resources” section of Oblicore’s web site http://www.oblicore.com/resources/index.php.

About Oblicore

Oblicore is the leading provider of Service Level Management software. The company's flagship product, Oblicore Guarantee^TM, automates, activates, and accelerates the monitoring, reporting, and management of all business technology service level agreements and service delivery for enterprises and service providers. An enabler of business management, Oblicore Guarantee allows organizations to understand the cost implications of service delivery agreements - in real time - for penalties, rewards, and new opportunities. For the first time, enterprises and service providers have complete visibility and can proactively manage service delivery across business and technology infrastructure from one solution.

Oblicore's software solutions are leveraged by both service providers and global 1200 enterprises, such as ABN Amro, BT, Cable & Wireless, E.ON, France Telecom, Lufthansa Systems, Siemens Medical Solutions, and T-Systems, to align their organizational performance with business objectives. Oblicore is headquartered in Cambridge, Mass., with offices across North America, Europe, and Asia Pacific. For more information, please visit http://www.oblicore.com.