Running IT-as-a-Service Part 43: Service level penalties and incentives for hybrid Cloud
Conclusion: Penalties and incentives are designed to ensure agreed critical service levels are achieved. Penalties are enforced whenever service levels are not met. Incentives are rewarded whenever agreed service levels are exceeded. However, there are cases whereby providers prefer to pay the penalty instead of improving the service level. For example, it is easier to pay a penalty of $10,000 instead of fixing a service issue that might cost $50,000. The purpose of this note is to prevent such situations from occurring and maintain the focus on meeting the service level in all circumstances.
About The Advisor
Dr. Wissam Raffoul was an IBRS advisor between 2013 - 2021 who specialised in transforming IT groups into service organisations, with particular expertise in IT Service Management (ITSM), process optimisation, outsourcing and Cloud strategies, enterprise systems management solutions and business-centric IT strategies. Prior to joining IBRS in August 2013, he was General Manager strategic consulting in Dimension Data advising clients on applying technology to improve business performance. Prior to joining Dimension Data, he was a Vice President in Gartner/META Group and issued various research publications covering service delivery processes, centre-of-excellence models, managing outsourcing vendors, benchmarks, maturity models, IT procurement evolution and supply/demand models. In previous positions, he headed HP ITSM consulting Practice in Australia. He also acted as an infrastructure manager, reporting to the CIO at a number of large organisations in government and in the financial and petrochemical industries.