CHAPTER 6
STEP 4: AGREE
6 Step 4: Agree
The purpose of the agree step is to align expectations and establish a shared view of the target service scope and quality between the service provider and the service consumer.
In some cases, agreeing can include contracting, which may require involvement from specialists, such as legal advisers or contract managers.
Table 6.1 summarizes why the service provider, service consumer, and other stakeholders should invest in aligning expectations and agreeing services.
Table 6.1 The purpose of aligning expectations and agreeing services
Agree |
For the service consumer |
For the service provider |
Facilitate outcome and experience |
To ensure that services provided meet customers’ and users’ requirements and expectations To increase potential value from services and service relationship To ensure a shared understanding of service quality among all stakeholders To ensure a shared understanding of responsibilities of the stakeholders |
To ensure a shared understanding of service quality among all involved stakeholders To ensure a shared understanding of responsibilities of the stakeholders To ensure realistic expectations from services and service relationship To increase potential value from service delivery and service relationship |
Optimize risk and compliance |
To ensure sufficient control of service quality and transparency of services’ status To counteract misunderstandings and misalignments between the parties involved To reduce the risk of non-compliance To ensure a shared understanding of service-related risks To arrange compensating controls for risks that cannot be shared or transferred through agreements |
To counteract misunderstandings and misalignments between the parties involved To reduce the risk of non-compliance To ensure a shared understanding of service-related risks To ensure a shared understanding of service price and associated payments, and reduce risks of payment disputes or delays |
Optimize resources and minimize cost |
To ensure a shared understanding of service consumption costs and associated payments To optimize service consumption costs To optimize cost of negotiation and agreement and overall resource utilization |
To ensure a shared understanding of service provision costs To optimize service provision costs To ensure a shared understanding of service price and associated payments To optimize cost of negotiation and agreement and overall resource utilization |
The target scope and quality of services should be agreed by all parties; in the remaining steps of the service relationship they will be referred to as the ‘agreed service scope and quality’. Unfortunately, it is unlikely that the agreed targets will always be met, so the achieved service scope and quality should be regularly compared with the targets to assess the fulfilment of the agreements. Targets may also move over time. Therefore, the agree step may be revisited many times during the journey.
In the context of the user journey, the purpose is very similar: to establish a shared view of target service scope and quality with the service provider. However, this may differ depending on the relationship between the user and customer roles. In some cases, the scope and quality are limited by the agreement between the customer and the service provider, so for users ‘agree’ may be limited to acceptance without (or with very limited) negotiation. However, it is still an important step of the user journey: understanding of the services available and their agreed quality is important for users to work effectively.
The ITIL story: Step 4 – Agree
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Mariana: When our customers join our car share club, they are agreeing to the terms and conditions we set out in our membership. Each booking is also subject to terms and conditions of use. For example, our agreement with Axle about car breakdowns is that roadside assistance is made available when a car breaks down or is involved in an accident. However, it is not available for regular maintenance such as a flat tyre. |
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Solmaz: Customers also enter into an agreement with us when they actually hire a car, to abide by the terms and conditions of hiring that vehicle. |
6.1 Agreeing and planning value co-creation
There should be a shared understanding of how and when value is co-created, tracked, assessed, and evaluated. One approach to this planning is to first agree on the factors that drive value and outline the expected service outcome and experience, and then to plan how and when to measure, assess, report, and evaluate the value co-creation.11 This planning should include risk management, compliance and cost, and resource management.
6.1.1 Types of service value drivers
In the service value system (SVS), the fulfilment of service consumer purposes is enabled by achieving service consumer objectives. Achieving service consumer objectives is powered by the consumer’s performance and the related experience. Service consumer performance is enabled by service performance and considered as utility and warranty. Finally, service performance is driven by the performance of the combined and individual resources, practices, and products. Figure 1.11 illustrates these relationships.
A service offering typically includes three forms of service performance drivers:
• goods transferred from the service provider to the service consumer
• access by the service consumer to the service provider’s resources
• service actions performed by the service provider, service users, or together.
Most service offerings combine several forms. Technology-based services usually include access to a service provider’s resources and, sometimes, service actions. Table 6.2 provides some examples of value drivers.
Table 6.2 Examples of value drivers for different types of service offerings
In Table 6.2, the first and the third examples are perceived by customers and users primarily in the context of service actions. This is typical for services designed to automate business activities. The second and the fourth examples are perceived primarily through the quality of the resources provided by the service provider. The different perspectives are usually reflected in the format of service agreements, because they are more focused on the quality of the resources provided, or on the performance of the service actions.
It is quite easy for a service provider to identify, agree on, and measure characteristics of the resources provided to the service consumer. In many cases, these are technical characteristics which are measurable and unambiguous. It is more difficult to define the service actions that are important to the service consumer.
6.1.2 Service interaction method
The service interaction method helps to describe and evaluate the service outcome based on the performance of key service interactions performed by the users and the service provider during service consumption. It helps the parties in the planning of value co-creation.
Service interaction method example
A bank has a value stream of provision of personal loans to its clients. This value stream includes a range of activities, most of which are enabled by IT services. After mapping and analysing the value stream, the following service interactions were identified, as shown below.
Service interaction |
Requirements |
Constraints |
Processing of a loan application |
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1. Current bad credit check |
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2. Affordability calculation |
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3. Credit rating assessment |
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4. Application scoring |
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5. Interest calculation based on risk |
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6. Confirmation or update of the offer |
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… |
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Loan agreement signing and transfer of the funds |
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8. Automated registration of a loan agreement and associated agreements |
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9. Opening an account and creating a payment schedule |
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10. Direct debit instructions set up |
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… |
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Loan agreement ongoing management |
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14. Interest calculation and account information update |
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… |
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Payments processing |
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28. Calculation of the payments due if a client requests to pay the loan in full |
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… |
Based on this list, the service provider and the customer agreed on the following service level requirements and metrics for some of the service interactions listed in the table below.
Agreed service level requirements and metrics | ||
Service level characteristics |
Customer’s requirement |
Service level metrics |
Automated loan application processing time |
Less than 60 seconds |
Percentage of the loan applications processed in time |
Maximum duration of a service outage for all loan-related systems used in a bank branch |
Less than 10 minutes |
Single outage maximum duration |
Total unavailability during a business day |
Less than 15 minutes |
Number and percentage of days when the requirement has not been met, over a period |
This method includes the following stages:
• identifying the service interactions, including service provider actions, service consumer actions, and joint actions
• matching identified service interactions with the service provider’s service catalogue
• agreeing on a service interaction target performance
• agreeing with customers and service provider teams on metrics and measurements for the services.
The best way to identify service interactions is by mapping the service provider and service consumer value streams. It is helpful for organizations to have up-to-date maps of their value streams and processes. From this information, the service provider and the service consumer can derive lists of operations supported by the services, related service interactions, and performance requirements.
However, it is not usual to find correct and up-to-date maps of the value streams and processes in organizations. Where they are unavailable, it is possible to identify service interactions using the organization’s documents and standards. The resulting lists will be more generic, but may be sufficient for the purpose of planning value co-creation. The customer’s and service provider’s requirements for service interaction performance can be derived from the associated internal procedures and standards of the organization.
This work should be done by a team, which may include:
• service and/or product owners
• customer(s)
• service/system architects
• service designers
• business analysts
• service catalogue manager(s).
6.1.3 Inherent and assigned characteristics of services
Definitions
• Service quality The totality of a service’s characteristics that are relevant to its ability to satisfy stated and implied needs.
• Service level One or more metrics that define expected or achieved service quality.
Organizations usually agree on an approach to define service quality. These agreements include the preferred methods for service specification and measurement, which are based on resources or service operations.
Inherent characteristics of the services may include:
• functionality and performance
• architecture
• interfaces and compatibility
• costs.
Assigned characteristics of the services may include:
• price
• risks and compliance
• transparency of service delivery
• monitoring
• reporting
• flexibility
• social responsibility.
The inherent characteristics are based on the resources of the respective product(s). The assigned characteristics are mostly defined as a part of service and service offering design. They describe how the service is delivered, supported, and improved, and may be altered without significant changes to the related products.
This distinction, although helpful for service management, is not definitive. Some characteristics, for example, compatibility or security, can be inherent (integration interfaces are part of product design) or assigned (integration as part of onboarding and ongoing support). The service provider decides which characteristics should be included in the service quality specification and which should be left to the discussion of service delivery circumstances, terms, and conditions.
The ITIL story: Agreeing and planning value co-creation
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Solmaz: There are several things we plan for and agree with customers in order to co-create value with them. |
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Mariana: We need to understand the value our customers expect to receive from our service and how they will assess whether this value has been created. In the case of a typical car rental, the value our customers expect comes from a car that is delivered promptly, in good condition, and fully charged. |
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Solmaz: The customer also expects us to provide reasonable and friendly management of their needs throughout the rental process. |
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Mariana: In turn, we have certain expectations of our customers, such as using our cars responsibly. |
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Solmaz: It is important that both parties know and agree in advance on what creates value for each other. |
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Mariana: Although we always seek to understand what creates value for our customers and provide a service to reflect that, we cannot create a personalized offer for every customer. Instead we use market research, along with personas and scenarios, to decide what to provide in our standard offering, in an attempt to make it relevant to as many of our customers as possible. |
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Solmaz: We constantly monitor this research to make sure that our offering stays relevant and is the standard template for what we provide. The metrics we use on the Axle service desk include the number of incident calls that are resolved on first contact. However, this does not measure the customer experience or value. |
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Mariana: When we start to design metrics based on the customer experience, we will gain a better understanding of how both the customer and Axle can co-create value. For example, we may find that customers are not particularly bothered about whether incidents are resolved on first contact. Value is perceived as prompt and courteous service that puts the customers’ concerns at the heart of the response. When we know how customers perceive value, we can devise metrics based on that perception, rather than using technical indicators. |
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Solmaz: Conversely, our customers need to understand that we do not have unlimited resources for support. By making sure that they are aware of the self-service options and know how to use them, we can shape demand for our support services. |
6.2 Negotiating and agreeing a service
The approach to negotiation and agreeing a service may vary significantly depending on the service relationship model. However, in most cases, the scope includes:
• the services to be provided and consumed
• inherent quality characteristics of the services, such as utility, warranty, and experience
• assigned characteristics of the services such as price, territory, and period of provision
• the approach to joint control and improvement of the service scope and quality.
There are several ways of settling the service scope and quality in a service relationship. These relationships can be:
• obligation-based
• agreement-based
• promise-based
• based on social rules and expectations.
These ways have different levels of formality, negotiation processes, and the approach to control and improve.
6.2.1.1 Obligation-based service relationships
Obligation-based service relationships are defined by an obligatory requirement imposed on organizations, typically by law or other legislation. The legislation may require a minimum level of service to be provided; sometimes it also mandates the service consumption. Some examples include:
• social services, such as medical services and education
• infrastructure services, such as transport or facilities security
• social responsibility services, such as mandatory insurance for drivers or travellers.
Although most of these services may be provided by commercial service providers, the minimum service level and price for the service consumer are often regulated by the state. This means that, regardless of the form of service agreement, it must include certain service quality characteristics with minimum service level guaranteed. If only the minimum mandatory service level is provided, there is no space for negotiation and agreement.
In some cases, the parties start with the mandatory service level, but agree to extend it and set the targets for service level accordingly. In these cases, they build their own agreement based on their obligations and expanded into the agreement-based relationship.
The ITIL story: Obligation-based service agreements
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Solmaz: To do business internationally, Axle Car Hire must respect the bilateral and regional trade agreements that exist between countries. These are obligation-based agreements that govern how we do business, how we employ people locally, and how we invest our returns. |
6.2.1.2 Agreement-based service relationships
Agreement-based service relationships imply that the parties involved in the service relationship negotiate and agree on the scope and quality of the services. They may document the agreement, electronically or on paper, and use it to monitor and manage the actual quality of the services. In most cases, the agreement is called a service level agreement (SLA). Depending on the relationship, it may take the form of a memorandum of understanding or, more frequently, a legal contract.
Definition: Service level agreement (SLA)
A documented agreement between a service provider and a customer that identifies both the services required and the expected level of the service.
It is important that an SLA is the result of an accurate discussion between both parties. Even if the service provider is inflexible and does not offer much space for negotiation, the customer should be provided with the services that were defined in the SLA with their informed consent. Awareness and consent are minimum requirements of agreement-based relationships.
SLAs may have different formality levels. The level of formalization may reflect the level of trust between the service provider and the service consumer. If the trust level is low, the organization will try to include as much detail in the agreement as possible. If the trust level is high and is gained through positive experience of the relationship, the parties tend to focus on the most important and specific service characteristics, implying that what is not mentioned in the agreement will be delivered and consumed according to established practice and expectations. These implications can be described as promises.
In high-trust service relationships, or if service characteristics are simple, agreements may be formed verbally or through a brief email or text message.
6.2.1.3 Promise-based service relationships
Promise-based service relationships were originally described by the promise theory, formulated in 2004 by Mark Burgess (Burgess, 2004). This applies to cases where intentions of the service provider and the service consumer are not documented, but implied by previous experience, social norms, or commonly agreed signs.
Promise theory
The key concepts of promise theory are intentions, promises, and impositions.
• Intention is a subject or type of possible behaviour.
• Promises are declarations or statements of intentions.
• Imposition is an attempt to induce cooperation in another party. Degrees of imposition include hints, advice, suggestions, requests, commands, etc.
For example, when someone raises a hand hailing a taxi, it is implied that the passenger:
• knows what the destination is
• will behave in the car following basic rules announced on the signs
• has considered the estimated price and is willing and able to pay.
At the same time, the passenger expects that:
• the driver knows the optimal route to the destination
• the car is regularly checked for safety and technical condition
• the taxi is licensed and insured
• the fare is either clearly announced or close to the amount this passenger usually pays for the same trips.
None of these is formally agreed by the parties. However, in most cases, these implications are correct. This is because by hailing the taxi, the passenger publicly declares an intention to follow some patterns and rules; likewise, by driving in a taxi car marked as vacant, the driver publicly declares an intention to follow the rules and patterns established for taxis in that country and city.
The rules and patterns implied by these declarations may differ from country to country, city to city, or one taxi company to another. These differences may create confusion and cause the parties to express their promises in a more explicit and formal way. This is why policies and rules are sometimes published on websites, taxi pools, and in the cars. These formal agreements are still forms of promises and impositions.
6.2.1.4 Relationships based on social rules and expectations
Informal promises and impositions are common in established, long-lasting service relationships. In line with previous experiences, the implied characteristics of the services are revealed to the service consumer at the initial stage. Moreover, the service provider expects that involved parties, such as customers, users, sponsors, and service consumer resources, will behave according to the established standards and agreed rules.
There are a variety of philosophical and sociological theories describing social contracts. Essentially, a social contract is the acceptance of the rules imposed by society and its government. In particular, it is accepted by individuals and organizations who live, work, and interact in the area where it has legitimate influence. The acceptance may be explicit or implicit.
This concept may affect service relationships because the standards and requirements of the government often influence the expectations of an organization, as well as impose constraints on the scope and quality characteristics of the services. In some cases, formal service agreements include statements about compliance with laws, local traditions, rules of the community, and other requirements, which are normally imposed by a social contract. This is an example of an explicit acceptance of the contract and may be useful when one of the organizations is unfamiliar with these requirements; for example, when establishing an international service relationship.
Example
When organizations decide to turn an internal service function into a separate company, they often expect to receive the scope and quality of services they are used to, based on years of previous experience. This is, however, rarely possible, especially if the new service company is expected to be commercially successful.
Regardless of the new formally signed service level agreements, expectations may continue to be based on the previously established norm. It is important to manage organizational changes like this effectively in order to maintain the required levels of service quality, costs, and user satisfaction.
At the practical level, service relationships are always supported by an explicit or implied agreement between the service provider and the service consumer. It is important to balance the formally recorded, implied characteristics of the services and the agreement itself. It should also be remembered that implied agreements are based on common assumptions and shared values. Organizations should consider culture, background, previous experience, and legislation when applying non-explicit agreements, especially when service relationships are established with new consumers or providers. Misunderstanding and misinterpreting the implied agreements may lead to tension and conflict.
6.2.2 Outcome-based agreements
In cooperative relationships and partnerships, organizations tend to discuss service quality from the value and outcomes perspective. Specifying utility and warranty levels is useful, as it enables the consistent monitoring and management of the services. When value for the service consumer is discussed, this discussion may focus on the expected outcomes or cover the risks and costs either reduced or introduced by the service.
The documented definition of value becomes a foundation for planning value co-creation and the joint tracking, assessment, and evaluation of value realization, which is discussed further in Chapter 9. The value definition is usually more important for organizations than adhering to service level requirements, although it is expected that both should be met. If the level of trust is high enough, the service provider may be allowed to adjust service levels and initiate service improvement, even if the agreed service levels are already met. Organizations may agree on the approach to service improvement and value enablement at the agree step and document this approach in their partnership agreement.
Value- and outcome-based approaches to service level management are equally applicable to internal and external relationships. Requirements include shared goals, mutual trust, and organizational agility.
The ITIL story: Outcome-based agreements
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Solmaz: Our agreement with the car cleaning company is outcome-based. For this agreement, we do not pay per resource or time spent cleaning; instead we pay according to the number of vehicles that are returned to us in a clean state. That is what impacts the customer experience. |
6.2.3 From service consumer needs to agreement
Depending on the service relationship model, the negotiation of service quality between service provider and service consumer organizations differs significantly. Some factors that affect negotiations are:
• internal or external relationship
• individual (one person organization) or corporate service consumer
• basic services or strategic partnership
• tailored or out-of-the-box services.
Most of these factors affect all the steps of the journey. Some examples of this influence are listed in Table 6.3.
Table 6.3 Examples of differences in service relationship journeys in various circumstances
Factor |
Examples of factor’s influence |
Internal service relationship |
Service provision and service consumption are likely to have the same sponsors Service provider and service consumer are likely to have the same strategic goals There may be no legal service contract Relationship may be based on command and control rather than partnership |
Individual service consumers |
Sponsor (of service consumption), customer and user are likely to be the same person with conflicting interests Number of customers is likely to be very large; an individual approach to negotiation is not viable Relationships are likely to be standardized and formal, rather than based on individual needs and partnership-like Simple and often automated agreement procedure |
Basic services |
Highly standardized service offerings and service requirements Simple and often automated agreement procedure Agreement is unlikely to be focused on outcomes or value |
Tailored services |
Individual approach to negotiation, delivery and assessment of services Tailored agreements (format, service level targets, assessment, and reports) |
One important commonality that service consumers and service providers should be aware of is that negotiation aims to narrow down the scope of service quality characteristics. This is illustrated in Figure 6.1.
All parties involved in the negotiation should understand that an agreed service level, especially in the form of a legal contract, only includes characteristics and targets that can be delivered with a high level of assurance and unambiguously measured. Another reason for this inclusion is the possible loss of information during the process from establishing needs and expectations to explicitly stated requirements, and then to the agreement. Moreover, in the case of out-of-the-box services, customer requirements are not directly translated to the characteristics of the services; they have to be compared and matched with pre-defined and published service descriptions, which are likely to have been designed without the customer’s involvement. This means that focusing on the fulfilment of the formal agreements is not enough to manage the quality of the services. It is important to monitor and discuss user and customer satisfaction and outcomes and value of the service consumption.
Although SLAs are insufficient for service measurement, assessment, evaluation, and improvement, they are still useful. There are various forms of agreements.
Figure 6.1 Limitation of agreements: from service consumer needs to agreement
SLA content and structure
The basic structure of an SLA is indicated by its name:
• Service Defines the scope of the agreement
• Level Defines the characteristics of the services and agreed metrics and targets for each characteristic
• Agreement Covers the terms and conditions of the service provision and consumption.
This structure may become more complicated if the agreement covers multiple services or reflects a consumer organization’s complex structure. For example, the ‘level’ and ‘agreement’ sections may include paragraphs that apply to every service or customer, and paragraphs that are service- or customer-specific.
The ‘agreement’ section usually becomes more complicated in agreements with external organizations (where SLAs are either a form of legal contract or a part of it). In subscription agreements, it may include specific clauses, such as period of subscription, rules and costs of cancellation, and methods of taking recurring payments. Whichever structure works better for the organizations, it is important to follow this guiding principle: keep it simple and practical. Where complexity is inevitable, it may be advisable (or required by legislation) to provide shorter explanations in clear and concise language. This is especially important for sensitive services, such as loans.
The ITIL story: From service consumer needs to agreement
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Solmaz: Based on the initial price we proposed to the car cleaning company, it responded by saying it could no longer use environmentally friendly products. Environmental sustainability is central to our vision at Axle Car Hire, so we had to re-negotiate a mutually beneficial outcome. |
6.2.4 Negotiating and agreeing service utility, warranty, and experience
The ‘level’ section of an SLA usually includes the agreed service level targets for service utility and warranty.
Definitions
• Utility The functionality offered by a product or service to meet a particular need. Utility can be summarized as ‘what the service does’ and can be used to determine whether a service is ‘fit for purpose’. To have utility, a service must either support the performance of the consumer or remove constraints from the consumer. Many services do both.
• Warranty Assurance that a product or service will meet agreed requirements. Warranty can be summarized as ‘how the service performs’ and can be used to determine whether a service is ‘fit for use’. Warranty often relates to service levels aligned with the needs of service consumers. This may be based on a formal agreement, or it may be a marketing message or brand image. Warranty typically addresses such areas as the availability of the service, its capacity, levels of security, and continuity. A service may be said to provide acceptable assurance, or ‘warranty’, if all defined and agreed conditions are met.
The management of service quality and service level should be focused on value, and all relevant characteristics of a service should be managed. This includes associated metrics, areas of experience, and feedback. The method of separating functional and non-functional characteristics of services, from the specification of requirements to the evaluation of the quality that has been achieved, comes from the separation of the development and operations teams. The separation of these characteristics and teams typically leads to a fragmented understanding of service quality.
Utility characteristics of services are usually described as functions performed by people and other resources of the service provider, or service actions (performed by the service provider, available to the users, or performed jointly). Some examples of service utility descriptions and metrics are provided in Table 6.4.
Table 6.4 shows that utility characteristics are often binary (it works or it does not work). Associated metrics are often based on incidents where important functions were unavailable or performance was unacceptably low. However, an overall assessment of a service utility can be based on an integration of multiple characteristics and related metrics. For example, if some functions of a system are unavailable or performed with a high number of errors, they can be assessed as a percentage of agreed utility rather than as a binary indicator. More information on service metrics and measurements can be found in Chapter 9 and the service level management practice guide.
Table 6.4 Examples of service utility descriptions and metrics
Service |
Examples of utility |
Example metrics and targets |
Mobile internet |
Connection to global internet network IP telephony for voice and video calls SMS |
Number of incidents where internet resources could not be accessed (<2 per month) Average connection speed (>10 Mbps) Percentage of calls where connection was interrupted (<5%) Audio or video quality was assessed by users as 3 stars out of 5, or fewer (<10%) Call or application connection could not be established (<5%) Percentage of SMS sent with delivery period above one minute (<5%) |
Business trip air ticket search and booking |
Flight search by dates, air companies, and fares Selection and booking of flights Frequent flyer’s cards recognition and application Policy conformance check Travel cost allocation to ongoing and project budget codes |
Number of incidents where search could not be completed (<1%) Number of reported incidents where better fares or flights available via other search engines were not offered by the service (<5 per month) Number and percentage of bookings which were not correctly allocated to a budget code (<5 per month or <2%) Number and percentage of incidents where flight search, booking, or payment could not be completed due to technical issues (<2 per month or <1%) Number and percentage of incidents where search, booking, or payment transactions timed out (<5 per month or <2%) |
Service warranty describes the level of assurance that the agreed utility will be provided in the agreed conditions. Conditions may include:
• territory and period of service provision
• demand/workload
• threats and associated risks
• users’ readiness
• applicable legislation.
‘Level of assurance’ means that within the agreed conditions, certain levels of availability, performance, capacity, continuity, security, usability, compliance, and other service quality characteristics are provided. Table 6.5 gives some examples of these in the case of a mobile internet service.
Table 6.5 Examples of warranty requirements and associated metrics
Warranty requirements |
Metrics and targets |
Conditions |
Availability |
Percentage of availability over one month (>99%) Number of interruptions (<3 per month) Maximum duration of an interruption (<15 minutes) Minimum uptime between interruptions (>3 hours) |
Within agreed service provision time and area, including home region and roaming destinations |
Performance |
Minimum download speed (>5 Mbps) Average download speed over period (>10 Mbps) Minimum upload speed (>3 Mbps) Average time to download a one-hour-long video (<5 minutes) Number of incidents of video call or video streaming interruptions or delays (<3 per month) |
Maximum number of simultaneous download processes is 3 For agreed list of official video hosting and communication services Within agreed service provision area, home network only |
Capacity |
Maximum number of simultaneous traffic-consuming apps, such as video streaming/download and video calls (5) Coverage (all rooms of the building) Monthly traffic (unlimited) |
Approved apps from official sources Within home network and selected roaming destinations |
Information security |
Number of security incidents caused by malware from the internet per month (0) |
As long as security settings and anti-virus software settings are not altered by users and all users follow information security guidelines |
Compliance |
Service provision and the service comply with the state regulations for personal data protection, copyright protection, and content control |
As long as content control settings are not altered by users and users follow information handling guidelines |
Continuity |
Maximum service restoration time in case of a major network disruption (<12 hours) Maximum time of switch to a back-up solution in case of a major network incident (<3 hours) |
If national electricity grid is available If at least one partner mobile operator’s network is available |
Accessibility |
All interfaces are clearly visible and easy to follow |
As long as users are not visually impaired and can read and speak English, German, French, or Spanish |
As discussed earlier, organizations are increasingly including user experience targets in the agreements. Many experience metrics are related to the service interface performance; others may indicate user satisfaction with either interface, or the service in general. Measurement of these can be integrated in digital services. Examples of experience metrics include the number and frequency of:
• user errors
• returns to the previous stage (back-button usage)
• help (F1) calls
• dropped (unfinished) service actions
• users who switched to a different channel during an advertising break
• users who cancel a subscription after a trial period
• users who confirm agreement with the terms and conditions without reading them.
Table 6.6 provides some examples of experience characteristics and metrics in the case of a business trip air ticket search and booking service.
Table 6.6 Examples of experience characteristics and metrics
Experience characteristic |
Metrics and targets |
Uninterrupted completion of user actions |
Number and percentage of bookings which were dropped unfinished per month (<50 or <5%) |
User satisfaction with the service |
Average and minimum rating given by users to the service over a period (>4 of 5; >2.9) |
Clear and convenient interface |
Number and percentage of transactions where users used the interface help over a month (<10 or <5%) Average and minimum rating given by users to the service interface over a period (>4 of 5; >3.5) |
The idea behind this is to measure the user experience directly and not simply to ask users about it. The term experience level agreement, or XLA™, was developed by Marco Gianotten (Gianotten, 2017). The experience-based approach to service definition and measurement is applicable to services where service actions are an important part of the service. There are many services with no or very few user interactions; for example, infrastructure as a service (IaaS) or platform as a service (PaaS).
The ITIL story: Negotiating and agreeing service utility, warranty, and experience
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Mariana: We have prepared standard agreements which we use when customers rent our cars. These include three key areas of responsibility. The first is focused on utility, which centres on the requirements of the car we provide and how it is used by the customer. |
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Solmaz: The second area focuses on warranty, which relates to the promises of reliability we make to our customers and the support we will give them in the event of any issues. The warranty also covers other aspects such as an extension to the customer’s contract or the provision of a new vehicle if there is a serious issue with the one they have hired. |
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Mariana: In line with Axle’s policies, the third area of responsibility includes a section that explicitly promises a positive experience for users of our cars, including such factors as waiting times to collect and return their cars, the communication they will receive from us, and the provision of extras with their service, such as drinking water in the cars. For our electric car share service, recharging stations are critical. Our campus recharging stations take only 20–30 minutes to fully charge a vehicle. However, recharging stations vary outside campus. We had to negotiate with several service providers who provide charging stations. Prices varied, and we found that cheaper options did not have the best utility, often taking more than 10 hours to fully recharge a car. |
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Radhika: Charging station networks usually come with a warranty. On campus, the warranty specifies that at least 90% of recharging stations must be functioning and available for our electric vehicles. |
6.2.5 Negotiating and agreeing other terms and conditions
Agreements between service providers and customers usually include terms and conditions that are not covered by utility, warranty, or experience. These terms and conditions may include:
• territory and period/schedule of service provision
• preconditions for service provision (user training, insurance, infrastructure, and software compatibility)
• rules and conditions for onboarding and offboarding
• rules and conditions for changing the agreement
• rules and conditions for changing covered products and services, performing tests, etc.
• rules and conditions of the service agreement termination and extension
• roles and responsibilities
• organization of the stakeholders in the agreement
• communication and communication channels
• governance of the agreement
• sources of funding of the service provision
• price, rules of price calculation, and methods and periods of payments
• enforcement methods (e.g. incentives, penalties, earning/loss of points, trust scores, feedback meetings, publication of contractual compliance, legal steps, and use of media)
• disputes
• assurance and compliance of the service provider and service consumer with relevant standards and other requirements
• rights and access to conduct third-party audits and reviews, request independent audit reports, etc.
Most of these come under the agreement part of the SLA structure; they describe conditions under which agreed utility is provided with the agreed level of assurance, or warranty.
The level of details and formality in this service agreement depend on the service relationship type and SLA structure. Commercial service provision to an external service consumer requires more formalities to be documented than non-commercial service provision within an enterprise.
Key message
Even informal agreements should include rules and procedures for service assessment and improvement. It is important to ensure that all relevant stakeholders are aware of these and willingly participate in related activities, such as feedback surveys, service review meetings, and improvement planning.
6.2.6 Standardizing and automating agreements
Like all other steps of the customer journey, this step may be standardized and automated to a great extent, especially when service relationships are being established with individual consumers. Table 6.7 illustrates how simple and quick it may be.
After these steps, a formal agreement is automatically formed and should be signed by the parties (often electronically). After this the service consumer and the service provider proceed to onboarding, which is discussed in Chapter 7.
To make this possible, service providers need to design and test their services, service catalogues, and supporting tools carefully. It is important to ensure that their services fit the purpose of the chosen relationship model. A pre-defined, automated approach to negotiation and agreement cannot be a solution for all service relationships; many service relationships are built on customized individual approaches and cannot be automated.
Table 6.7 Examples of typical agreement actions for services provided to many individual consumers
Elements to agree |
Negotiation and agreement actions |
Scope |
Available services are pre-defined by the service provider. The customer selects from the available catalogue with or without consulting the service provider. Selection is made through an automated interface. |
Inherent quality characteristics |
For the selected services, a few pre-defined options are available. These options may be customizable or pre-packed in service level packages. The customers select the option(s) that best meets their needs and requirements. |
Assigned quality characteristics |
For the selected services and quality, a few pre-defined delivery options may be available, such as the form and schedule of payments, period of service provision, territory of service provision, etc. The customers select the option(s) that best meets their needs and requirements. |
Approach to control and improvement |
The means of control, reporting, and feedback are pre-defined by the service provider. The customer is informed and forced to accept these conditions in order to proceed with the agreement. |
To successfully reach an agreement on service relationships and service quality, organizations should apply the following ITIL management practices:
• business analysis
• relationship management
• service catalogue management
• service financial management
• service level management
• supplier management.
Readers should refer to the respective ITIL practice guides for details.
The ITIL story: Standardizing and automating agreements
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Mariana: Our service for booking a car is automated online and via the Axle booking app. No negotiation takes place between eCampus Car Share and the customer. However, on accepting the booking, we ask customers to explicitly agree to the terms and conditions of hiring our cars. After they agree, then they have entered into an agreement with us. They do not need to sign lengthy legal documents each time they book a car. |
6.3 Summary
To drive and track stakeholder value, expectations must be aligned, value co-creation mapped and planned, and the service scope and quality agreed.
The approach depends on the type of relationship and the nature of products and services, but a service relationship is always supported by an explicit or implied agreement between the service provider and the service consumer.