IT outsourcing companies in recent years are increasingly asked by customers to charge for their services based on “output”. This model though is common in some industries is unusual for an industry like software, where well planned estimations often go haywire. Collecting metrics and sharing them with customers has been a standard practice followed in the software industry for many years. However, setting, tracking and managing Service Level Agreements (SLAs) contractually is something service providers are still struggling to come to terms with.

The continuous push by the customers towards shared responsibilities has ensured gradual adoption of SLA by IT outsourcing companies. Today, the SLA based payment model has extended to all spheres of software services including Software Testing, Infrastructure Support etc.

The SLA based testing services provides the customer consistent quality of service which is monitored regularly by the SLA approach. It also elicits increased accountability on the part of the vendor.  In due course, the vendor also develops deep capabilities that differentiate itself in the increasingly commoditized testing services market.

However, both parties need to be aware of a few things before taking the plunge into SLA based testing services. Listed below are the major areas that need to be actively considered by both the Vendor and Testing Service provider.

Objectively measurable SLAs

The SLAs need to be defined in a way that can be measured without ambiguity.  The SLAs may define the automation, test execution goals numerically. The metrics like daily test execution rate, false-positive yield, etc. allows the customer to objectively track the performance of the vendor on a day-to-day basis.

Collaborative Communication

To make SLA-based testing possible there are several finer points that need to be worked upon throughout the engagement. Aspects like environment issues, test case quality, UI changes to the application, compatibility testing need participative communication on both the vendor and customer’s side to bring out the best result.

Testing Skills and Expertise

SLA Based testing comes with greater responsibility for the Vendor. The vendor should be able to foresee potential challenges that might prevent them from meeting the SLAs. This requires both skills and expertise gathered over time. Non-compliance can result in financial penalties and ultimately contract termination.

SLA Feasibility Check

The feasibility of SLAs must be determined before signing up the final agreement for the SLA-based Testing project.  The SLAs should mandatorily go through a Nurture period before making the Go/No-Go Decision. In the Nurture period, the project is taken up on a trial basis to check the viability and to further refine the SLAs.

SLA Reviews

The SLAs should be reviewed periodically to further smooth out the process and yield further gains in productivity. Such reviews are necessary to apply the key learnings that help the process to converge towards the perfect arrangement.

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