An Experiment in SLA Decision-Making

Decision-making with regard to availability service level agreements (SLAs) is investigated. An experimental economics approach was used to elicit the preferences for different SLA alternatives from the subjects (N = 16), all professionally working with IT management. A previously published scenario on downtime costs in the retail business was used in the experimental setup. Subjects made 18 pairwise choices under uncertainty. After the experiment, they were paid based on one of their choices, randomly selected. The subjects rarely behaved as expected utility maximizers in the experiment. This raises questions about company SLA management in real situations, and calls for further research.

[1]  Rajiv Kishore,et al.  The Role of Service Level Agreements in Relational Management of Information Technology Outsourcing: An Empirical Study , 2009, MIS Q..

[2]  Evan Marcus,et al.  Blueprints for high availability , 2000 .

[3]  Schahram Dustdar,et al.  VieSLAF Framework: Enabling Adaptive and Versatile SLA-Management , 2009, GECON.

[4]  Edieal J. Pinker,et al.  Call Center Outsourcing Contracts Under Information Asymmetry , 2008, Manag. Sci..

[5]  Kamal Bhattacharya,et al.  Change scheduling based on business impact analysis of change-related risk , 2010, IEEE Transactions on Network and Service Management.

[6]  Michael Goul,et al.  Service Level Agreement Negotiation: A Theory-based Exploratory Study as a Starting Point for Identifying Negotiation Support System Requirements , 2005, Proceedings of the 38th Annual Hawaii International Conference on System Sciences.

[7]  Gyoo Gun Lim,et al.  Exploring Impacts of IT Service Failure on Firm's Market Value , 2008, 2008 Fourth International Conference on Networked Computing and Advanced Information Management.

[8]  W. G. Davenport,et al.  Expectation theories of decision making for duplex gambles , 1973 .

[9]  M. Vangel.  System Reliability Theory: Models and Statistical Methods , 1996 .

[10]  Jos J. M. Trienekens,et al.  Specification of Service Level Agreements: Problems, Principles and Practices , 2004, Software Quality Journal.

[11]  H. Lindman,et al.  Stimulus complexity and choice inconsistency among gambles , 1978 .

[12]  Björn Schmitz,et al.  Incorporating Business Impact into Service Offers - A Procedure to Select Cost-Optimal Service Contracts , 2012, AMCIS.

[13]  David J. Sherwin,et al.  System Reliability Theory—Models and Statistical Methods , 1995 .

[14]  Sebastian Abeck,et al.  How to Support the Negotiation of Service Level Agreements (SLAs) for Your Client/Server Application? , 1999 .

[15]  Ulrik Franke,et al.  Optimal IT Service Availability: Shorter Outages, or Fewer? , 2012, IEEE Transactions on Network and Service Management.

[16]  Subhajyoti Bandyopadhyay,et al.  Cloud Computing - The Business Perspective , 2011, 2011 44th Hawaii International Conference on System Sciences.

[17]  Ulrik Franke,et al.  An architecture framework for enterprise IT service availability analysis , 2014, Software & Systems Modeling.

[18]  Filipe Marques,et al.  SLA Design from a Business Perspective , 2005, DSOM.

[19]  Thomas Hess,et al.  Overconfidence in IT Investment Decisions: Why Knowledge can be a Boon and Bane at the same Time , 2011, ICIS.

[20]  Costas Courcoubetis,et al.  Managing and pricing service level agreements for differentiated services , 1999, 1999 Seventh International Workshop on Quality of Service. IWQoS'99. (Cat. No.98EX354).

[21]  David A. Patterson,et al.  A Simple Way to Estimate the Cost of Downtime , 2002, LISA.

[22]  Akhil Sahai,et al.  A Game Theoretic Framework for SLA Negotiation , 2008 .

[23]  Philip S. Yu,et al.  Utility computing SLA management based upon business objectives , 2004, IBM Syst. J..

[24]  Mark Keil,et al.  Effects of information technology failures on the market value of firms , 2009, J. Strateg. Inf. Syst..

[25]  Liviu Dan Serban,et al.  A Framework for Building Intelligent SLA Negotiation Strategies under Time Constraints , 2010, GECON.

[26]  Colin Camerer.  Bounded Rationality in Individual Decision Making , 1998 .

[27]  Claudio Bartolini,et al.  Management by contract , 2004, 2004 IEEE/IFIP Network Operations and Management Symposium (IEEE Cat. No.04CH37507).