This document discusses how service level agreements (SLAs) need to evolve with the adoption of outcome-based pricing models for business process as a service (BPaaS). It notes that outcome-based pricing is still rare and that SLAs will need to be expressed in business terms and measured by business outcomes rather than technical metrics. It also introduces CAST software as a tool that can help measure SLAs in a BPaaS environment by identifying key performance indicators (KPIs) linked to business outcomes and benchmarking them over time to establish baselines and monitor performance.
10. CAST Confidential
Software is Eating the Business Process
10
Map the Processes Identify the
Dependencies
Identify Failure
Points
DefineSMART
SLAs / KPIs /
OLMs
Link SLAs /
KPIs / OLMs
to E2E SLAs
Business Outcome
Billing Timeliness
Process #1 Process #1
Application
Database & Middleware
Operating System
Compute
Storage Network
OUTCOMES
► Success and accuracy
PROCESSES& APPLICATIONS
► Straight Through Processing – Number of re-
keying steps, queue pauses processes
► Availability (incl. Change Mgmt.)
LOGICAL INFRASTRUCTURE
► Query and procedure call level response
► Service session response
PHYSICAL INFRASTRUCTURE
► Availability (incl. Change Mgmt.)
► Utilization & Capacity
► Throughput (Input/Output)
Bad software cripples
Good processes, yet companies
measure everything but the software.
PRODUCT
MEASURES
PROCESS
MEASURES
Time &
Duration
Effort &
Budget
Function
& Scope
Quality
Risk
SECURITY RISK
PERFORMANCE RISKS
ROBUSTNESS – RISK OF OUTAGES
MAINTAINABILITY
INCIDENTS
DEFECTRATES
SYSTEMAVAILABILITY
PROJECTTRACKING
SCHEDULING
TIME TRACKING
BUDGET
REPORTING
EARNED VALUE
FUNCTIONALTESTING
USER ACCEPTANCE TESTS
USABILITY
11. CAST Confidential
Industry standard measures of good software
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Description Prevent
Transferability
Determines how easily a new team or
team member can be productive when
assigned to work on the application
SME Dependency, ramp up delays
Delivery inefficiency, reduced output
Time-to-market delays
Changeability
Determines how easily and quickly an
application can be modified
Correction and evolution delays
Late delivery of new features
Inability to resume services
Robustness
Determines the risk of failures or
defects that could occur in production
Operational downtime
Application outage
Inability to test source code updates
Performance
Efficiency
Determines the risk of performance
issues of an application
Application Degradation
Response time degradation
Denial of Service, Logic issues
Security
Determines the risk of security
breaches for an application
Damaging Business & Operations
Security failures
Maintainability
(SEI)
Determines the cost and
difficulty/ease to maintain
an application
Drifts on maintenance costs
12. CAST Confidential
1. Identify outcomes that are critical to the business / business process
2. Map to KPIs / Risk Indices
3. Measure to establish baseline / benchmark against industry
4. Monitor overtime – before software is released into production
End User productivity
Customers satisfaction
Brand equity
Uptime / Availability
Cycle Time
Time-to-market
Business agility
SECURITY
Risk of
Failures in
Production
Risk of
Performance
Issues
Risk of
Security
Breaches
Ease of
Modifying and
Learning
RELIABILITY PERFORMANCE MAINTAINABILITY
Constructing Outcome-Based Measures
14. CAST Confidential
Product Measures Lead to Cost Reduction and Improved Agility
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Study of maintenance effort across 20 customers shows tight
correlation between maintenance fix tickets and CAST TQI
Increase of CAST TQI by 0.24 = decrease in maintenance activity by 50%
TechnicalQualityIndex(TQI)
2.2
2.4
2.6
2.8
3
3.2
3.4
3.6
0 50 100 150 200
Ticket Volume