BUSINESS TERMS
Model for a Telecom Operator Business View of SLA
Carlos Bueno Royo, Juan Lambea Rueda, Óscar L. Dueñas Rugnon, Beatriz Fuentes
and Alfonso Castro
Telefónica Investigación y Desarrollo (Telefónica I+D), Emilio Vargas 6, Madrid, Spain
Keywords: SLA, Business Terms, Marketplaces, Product Lifecycle, Service Aggregation, Business Model.
Abstract: The rapidly growing service-oriented economy has highlighted key challenges and opportunities in ICT-
supported service and product lifecycle management. From a service consumer point of view there is no
standardized way to locate, evaluate, negotiate and monitor services. Composition of third party services is
fraught with uncertainty due to absence of definitive SLAs. Moreover, there is a lack of a standardized,
homogenized and extended-used model for a set of business terms for SLAs that allows an automatic
negotiation of products with customers and with third parties. So, from the service provider perspective,
creating customized service offerings, negotiating with individual customers, and translating from business
requirements into specific internal provisioning manifestations consumes valuable time and resources.
Furthermore, there is no mean to create attractive products composed by several different services coming
from different domains and consolidate the underlying SLAs in a business customer-faced SLA. Ultimately,
the service marketplace is frustrating and cumbersome for both service providers and consumers: a
significant opportunity has arisen for a holistic SLA-management framework, able to understand and
manage such a set of integrated and homogenized set of business parameters.
1 INTRODUCTION
The ongoing transformation of a product-oriented
economy towards a service-oriented economy has
come to a critical point. IT-supported service
provisioning, aggregation and commercialization
have become of major relevance in all industries and
domains. However, the nature of these services is
typically quite static, because it requires significant
effort to create service offers, to negotiate
provisioning and business details with customers
and to manage and control provided services.
From a business point of view, there is a need to
hide provisioning low level details to customers. In
this way, there is a gap in the management of
Business SLAs that drives the product lifecycle.
Business SLAs, which contain basically business
terms for the implied services in the product sale,
have to be translated to lower layers SLAs (software
and infrastructure levels), so the product provision
could be properly performed (Theilmann,2008).
From this perspective, it is essential to provide a
mean to create true integrated Business SLAs from
atomic services and build product offerings with a
homogeneous set of business terms that can be
rapidly understood by customers, hiding lower level
details.
Furthermore, in multi-provider and multi-domain
scenarios where is possible to create products with
services coming from different domains, it is
essential to be able to consolidate the different SLAs
of the composed service into a unique business SLA.
Moreover, the set of business terms proposed has to
be used between providers, so the composition of
products from third-provider services can be easily
and faster made. The integrated SLA will be the one
negotiated with final customers, so that underlying
services requirements, multi-domain provisioning
difficulties and business relationship between
providers are hidden to customers. The creation and
composition of such a holistic SLA, and its
following monitoring and assessment, is a challenge
that must be faced in order to be able to build
attractive and proper product offers in the top of the
future frameworks and clouds (Comuzzi, 2009).
The aim of this paper is try to make a definition
of the needed business terms for B2B transactions
that have to be consumed by final customers. New
business environments need to be automated in some
188
Bueno Royo C., Lambea Rueda J., L. Dueñas Rugnon Ó., Fuentes B. and Castro A. (2010).
BUSINESS TERMS - Model for a Telecom Operator Business View of SLA.
In Proceedings of the International Conference on e-Business, pages 188-194
DOI: 10.5220/0002988401880194
Copyright
c
 SciTePress

issues, such as product discovery and contracting.
But it is also essential to define the business terms to
be agreed. Furthermore these relationships between
customers and providers have to be supported by
business SLAs built from artefacts, terms and
features that are introduced in this paper, such as
business terms.
To do so, the paper firstly briefly summarizes the
state of the art on the industrial approaches related to
business SLA models. Following, it is defined and
explained a business model. In section 4, the paper
proposes a set of business terms in which the SLA
model could be based. Next, it is presented how the
business model could be applied in the telecom
industry. Finally, we state the main conclusions
extracted from the paper and the future works in this
line.
2 INDUSTRY APPROACHES
There have been many efforts to try to consolidate a
set of definitions concerning enterprise information,
especially business data. Therefore, there are many
standardization organizations working on this; the
TMForum (TeleManagement Forum, 2010) and the
ITSMF (Information Technologies Service
Management Framework) (ITSMF, 2010) currently
are the most relevant at ICT business level.
Consequently, the most important ones in this field
have been achieved in initiatives, such as: SID
(Shared Information and Data Model)
(TeleManagement Forum-SID, 2010), ITIL
(Information Technology Infrastructure Library)
(ITSMF-ITIL, 2010) and eTOM (enhanced Telecom
Operations Map) (TeleManagement Forum-eTOM,
2010).
The eTOM is the most widely used and accepted
standard for business processes in the
telecommunications industry. The eTOM model
describes the full scope of business processes
required by a service provider and defines key
elements and how they interact. This model also
includes a specific process for SLAs.
On the other hand, ITIL concentrates on IT
Service Management capabilities, focused on the
kind of services and service management that IT
systems provide within organizations, independent
of the kind of business or industry sector concerned.
These reference frameworks (eTOM and ITIL) can
be considered as complementary. eTOM provides
the “big picture” while ITIL details the operations
processes addressed and a v iew of process
interfaces.
The other initiative identified is the SID, but this
will be explained in detail in next subsection.
However, the relationship between eTOM and SID
is following the NGOSS initiative (TeleManagement
Forum-NGOSS, 2010), where first, it is necessary to
establish a business analysis, and then, it is defined
the data analysis. In the NGOSS initiative eTOM
supports the business analysis and SID initiative
supports the data analysis.
2.1 SID Model
SID is a set of comprehensive standardized
information definitions aiming to be the common
language for building easy to integrate OSS
(Operational Support System) and BSS (Business
Support System) solutions. It has a specific model
for SLA agreements.
The SID model focuses on what are called
“business entity” definitions and associated attribute
definitions. A business entity is an actor or object of
interest to business such as customer, product,
service, or network, with attributes describing the
entity. Together, the definitions provide a business-
oriented perspective of the information and data that
it is needed to run in an organization.
With eTOM, the SID model provides enterprises
with not only a process view of their business but
also an entity view. That is to say, the SID provides
the definition of the ‘things’ that are to be affected
by the business processes defined in the eTOM. The
SID and eTOM in combination offer a way to
explain ‘how’ things are intended to fit together to
meet a given business need.
The SID model also defines attributes for
Business entities and relationships between them
and is represented using an UML model that
provides an architecturally oriented business view of
business entities, their attributes, and relationships to
other business entities.
In the following figure, the domains and the level
1 of Agreements Business Entities of the SID
Business Model are presented:
BUSINESS TERMS - Model for a Telecom Operator Business View of SLA
189

Figure 1: SID domains.
SID model has a common entity specific for
agreements called Agreement. An agreement is a
contract or arrangement, either written or verbal and
sometimes enforceable by law, which involves a
number of other business entities, such as Services,
and/or Resources.
SLA is a type of agreement represented in the
SID model by the Service Level Agreement entity.
Both entities – Agreement and Service Level
Agreement – consist of items which make the link
between the SLA and the Product/Service/Resource
it applies to.
For this purpose, SID Service Level Agreement
Item entity establishes relations with entities in
different domains.
2.2 SLA Management Handbook
There is another relevant reference framework, the
SLA Management Handbook series
(TeleManagement Forum-SLA, 2010), this is a
handbook to assist two parties in developing a
Service Level Agreement (SLA) by providing a
practical view of the fundamental issues. The parties
may be an "end" Customer, i.e., an Enterprise, and a
Service Provider (SP) or two Service Providers. In
the latter case one Service Provider acts as a
Customer buying services from the other Service
Provider. For example, one provider may supply
network operations services to the provider that
supplies leased line services to its customers. These
relationships are described as the Customer-SP
interface and the SP-SP interface.
The perspective of the SLA Management
Handbook series is that the end Customer, i.e., an
Enterprise, develops its telecommunication service
requirements based on its Business Applications.
These requirements are presented to a Service
Provider and the two parties begin negotiating the
specific set of SLA parameters and parameter values
that best serves both parties. For the SP, the agreed-
upon SLA requirements flow down through its
organization and become the basis for its internal
management and control of its Quality of Service
(QoS) processes. For the Enterprise Customers, the
SLA requirements serve as a foundation or a
component of its internal network services or
business services. The SLA requirements define and
limit the offer and the consumption of the service for
both parties that are joined. It means that affect to
the consumption of the customer and the offer,
service level and support of the service by the
service provider.
3 BUSINESS SLA MODEL
This section presents the Business SLA Model as a
series of inter-related UML Class Diagrams. The
starting point was the identification of the main
concepts of the SLA model from the business point
of view as basis for the construction of a Business
SLA Model. The business models is then translated
to a collection of Business SLA Parameters , which
has been defined as business terms
This work is based on a generic SLA model
defined in the SLA@SOI project and described in
(SLA@SOI, 2009). Class diagram in figure 2, taken
from (SLA@SOI, 2009) captures the main notions
concerning SLAs. The class Agreement is a
symbolic artefact representing a potential Agreement
between a Customer and a Provider concerning the
delivery of a Service – e.g. an agreement which has
been proposed, but which may still be subject to
further negotiation. The subclass SLA, instead,
denotes an actual ServiceAgreement – i.e. one that
has been formally accepted by both Customer &
Provider.
Figure 2: SLA Model classes.
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The SLA comprises a set of GuaranteeTerms – each
of which describes an Obligation on the part of the
either the Customer or Provider to respect various
ServiceConstraints. These Obligations, in turn, may
be associated with various penalties or rewards -
termed BusinessValues.
In the previous paragraphs we have described a
generic SLA Model, valid to express the agreement
conditions in any of the layers of the IT stack. In the
following, this model will be refined introducing
business-specific concepts.
This generic model can be particularized
introducing business-specific concepts as service
upgrade procedure, SLA update procedures, backup
& recovery mechanisms, information about the
service support system, termination information,
tarification and billing .
The SLA may also contain appropriate
monitoring policies – i.e. rules governing how
monitoring of the service is going to be
implemented. The SLA Monitoring model is further
decomposed in Figure 3:
Figure 3: Monitoring model.
A KPI (Key Performance Indicator) is used to define
measurable and exposed properties associated with a
service, such as response time and throughput. The
properties are used to express service level
objectives (SLOs). The exact definition of a KPI is
provided by a Metric, which also specifies how to
measure or to compute the Performance Indicator.
A Metric is composed by a set of parameters that
are measured from a service providing system
(MeasurementDirective) or computed from other
metrics and constants (Function).
The SLA has attached a set of MonitoringPolicy,
which describes the monitoring activities:
parameters to be collected and measures to be made,
data collection and measurement intervals, and
aggregation intervals.
The SLA should include a description of the
monitoring reporting activities. , including reporting
specification (content, format, frequency, delivery
mechanism...) and the description of the procedure
to request changes in the reporting process.
Apart from the monitoring, one of the most
important topics from the business point of view is
the tariff and billing procedures. In Figure 4, the
billing part of the SLA model has been magnified:
Figure 4: Billing concepts and model.
A BillDescription describes the detailed structure of
the customer‟ s bill. It indicates when to initiate the
bill creation, as well as the frequency of the billing.
It also specifies the billing mechanisms, detailing
how the service is charged (i.e. for service usage).
This description should include a BillFormat,
representing the presentation format of the bill. This
bill may be sent to the customer through various
media (for example, email, post mail ...).
The data needed for the billing process are
represented by the Customer and PaymentMethod
classes. Customer encapsulates all the customer data
needed to contact him, i.e. name, address, e-mail,
phone number. The PaymentMethod class represent
the method used for payment. As an example, two
subclasses have been included in the figure:
BankTransfer, which includes the name of the
financial institution and the account number where
the bill will be charged, and the CreditCard, defined
by the card number and the expiration date. Other
payment methods can be added by extending the
PaymentMethod class.
In some cases, the usual billing charge may
suffer an alteration, represented by the BillAlteration
class. The type attribute indicates the nature of the
discount, i.e. a promotion, a reduction due to a
violation of the signed SLA, or even an increase
derived from a penalty applied to the Customer.
Next section shows in detail how this Business
SLA Model has been translated into specific
Business Terms to be included in the SLA
document.
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191

4 BUSINESS TERMS
In the following lines we explain the different
aspects, terms and features that may be expressed at
business level in the SLAs.
Functional Description: The offered service must
be detailed in terms of the features and functionality
supported and available to customers.
This information must to be completely enriched
with service categorization and/or specification in
order to be able to classified it. Also it must be
appropriate to add semantics details that can be used
to explain the full description of the service.
Business Model Supported: All the information
referring to the selling process must be defined and
described in detail, to avoid ambiguity for the
customer. The business model description should
detail:
• Offer types associated with the Quality of
Service supported for each one
• Pricing model
• Billing and payment constraints
• Modification and alteration of prices if
applicable
• Restrictions and constraints
Penalties: Detailed specifications about the
penalties incurred when problems arise in the
consumption of the service. This information is
attached to the guarantee terms definitions that
explain in detail how the different agreed terms are
used. Each Guarantee Terms defined in the SLA
must to be expressed in terms of parameters that
express the conditions to be evaluated, the KPI
target to be fulfilled and the evaluation
characteristics to be taken into account for checking
the generation of the penalty. In this way it is
necessary to specify the periodicity of the checking
explained before (assessment time interval) and the
economic value associated to it to be generated.
Termination Clauses: The termination clauses have
to be automated and they have to accommodate both
parties in the contract. The termination of the SLA
can be triggered by certain customer aspects as well
as by certain service provider constraints. Also it
must be defined the conditions below to be
communicated to the parties.
Service Information Events, Monitorization and
Reports: It must be possible for the final customer
to select the kind of information that they wish to
obtain automatically and how it has to be monitored.
This information is defined in terms of events
monitored as well as reports associated with the
customer’s service. For instance a customer that uses
a storage service may want to know how large their
storage consumption is per day). This information is
just used to report customer, and might not be
correlated with Guarantee terms of the SLA.
Features about the reporting that can be defined can
be based on different parameters:
• Type of report (based on service activities
parameters, only on penalties of the SLA, …)
• Communication channel for sending the reports
to the customer (i.e. by email, by SMS/MMS,…)
• Report frequency (i.e. hourly, diary, monthly,…)
• Content customization of the report
Support Mechanism and Contact Details: It must
be possible to specify the kind of support offered to
the customer should they have a problem or inquiry.
The support information provided should include
timetable details as well as details of the different
support channels available. For instance, it may
specify a telephone number and the days and hours
of availability. This information is complementary to
the contact data of the customers or service
providers such as, their whole names, telephone and
fax numbers or the email address.
Other important aspects to be taken into account
are the supporting procedures. It specifies how the
support team will responds to an error
communicated by the customer, that is, the level of
severity of the errors and the associated times to
respond and solve to them. The supporting
procedures, usually define different levels of the
support, based on the kind of problem that can arise.
With the classification of the problem, the
supporting procedures and timeline defined is
different. That information is very important in the
consumption of the services and it has to be clearly
defined.
Disaster Recovery and Data Security in IT
Systems: It must be possible to define
Backup/Restore policies in order to guarantee the
persistence of information, if the service offered to
the customer manages and stores data. Also it must
be possible to define the security mechanisms that
are employed by the service. The terms and features
needed for whole business service must to be
concreted also in the SLA:
• Backup: Specifies how the system will make a
backup of the important information in terms of
the frequency, the mechanism type (full, mirror,
incremental) and the estimated time needed to do
this.
• Recovery: Specifies how the system will perform
a service recovery in case of a fatal error in terms
of the mechanism type (full, mirror, incremental)
and the estimated time needed to do this.
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Changes to Terms in the Service: The process to
update the service conditions or characteristics must
also be considered. It must also be possible to define
the mechanism used to inform the customer about
such changes. Also it must be possible to define the
frequency of updating process, how the customer
will receive the actualization, notification or the
instructions to install it (if it is something that
depends on the customer operation).
Customer/Provider Requirements and
Constraints: In many cases, it is necessary for the
customers or providers to express some
requirements in terms of limits or constraints in the
service consumption. Usually these aspects are
related to legal constraints to be followed by the
customers or providers of one specific country,
because they are imposed by the relevant Regulatory
Authority.
Example constraints may include:
• Personal data storage cannot to be stored outside
the country
• Maximum prices and/or quality shall apply
• Restrictions in sharing of personal data with third
parties associated with the service provider
• The prohibition of delivery advertisement
• Personal data usage restrictions for specific tasks
(e.g. data mining)
5 BUSINESS APPLICABILITY
So far, we have showed a business SLA model and a
set of terms associated to it. But how can they be
applied in the Telecom operator business?
Until recent times, the classic business Telecom
operator was associated with the network, even
when its prior service, voice, was offered over an ad
hoc one, the public switched telephone network
(PSTN) that evolved from an analogue and fixed
network to digital and mobile ones.
Nowadays the environment has changed. The
advances in technology have allowed the
modification of the service concept. So the service
provider can offer services available at any time or
place, accessible using any kind of access network
and regardless of the kind of device you use. Also
new roles have appeared: services providers,
infrastructure providers, content provider, telco
provider … as well as new actors which can assume
different roles.
Google is a clear example: in its beginning
Google was a simple information searching engine
and nowadays it has announced its entry in the
telecommunications business with its project to
deploy a high-speed network in United States.
On the other hand, telecommunication
companies are attempting to expand their traditional
business and become smart players in the content
management market. The boom of the mobility and
the connected devices has open new business
possibilities. The future trend is that mobile devices
will be used for the remote management of services
in our daily life as part of what has been called
Digital Personal Environment. The content and the
communication channels and devices will be deeply
linked. Telcos are aware of the increasing
importance of software, that will allow the
management of this foreseen on-line world.
Moreover, users become prosumers, participating in
the service creation and generating income.
Telecommunication companies want to take
advantage of this, and they are already creating
platforms to help the developers sharing with them
the profit of the applications. Wholesale
Applications Community is an example of this type
of platforms. This alliance, being launched by
twenty-four of the world largest phone operators,
aims to make it easier for developers to build and
sell apps irrespective of device or technology.
The challenge of entering new markets also
implies that the business model of the
Telecommunication companies must evolve from
the traditional model of customer proximity, high
margins and high commitment to a one with distant
relationship with the customer, lower margins and
lower commitment.
This new marketplace must support the
registration of multiple heterogeneous services, from
different providers (prosumers) and industries,
guaranteeing at the same time the quality of the
delivered services, and maximizing revenues. New
relationships and agreements among participants
will be established, allowing the creation of new
services by composing atomic services of different
providers (Bueno, 2008).
The new situation requires the coherent
management of the supplied services, and Service
Level Agreements (SLAs) are a mean for doing this.
SLAs specify the conditions under which services
are delivered, but they can also be used for
managing the provisioning and runtime functioning
of the services. The end-to-end governance of the
service lifecycle expands across the business,
software, infrastructure and network layers, and
therefore the SLAs must also be translated across the
different layers. In this environment a precise
definition of the business terms comes of crucial
BUSINESS TERMS - Model for a Telecom Operator Business View of SLA
193

importance, since they subsume the relationship not
only with the customer but also with a third-party
provider. A Business SLA may specify for instance
the levels of availability, quality of service,
performance, billing methods and even the penalties
when the agreement is violated. These business
terms will allow the automatic negotiation with
customers and third parties in this new marketplace,
and the translation to lower level SLAs helps to the
automation of the provisioning procedures and
runtime QoS monitoring and adjustment.
6 CONCLUSIONS AND FURTHER
WORKS
The Business SLA terms have been identified to
fulfill and define the business relationship between
customer and provider in automated systems that can
be used in business to business approaches.
This approach is based on a deeply study of the
Business SLA Model and other different works
based on SID and eTom framework from TMForum.
The results of this paper identify and define a
proper Business SLA model for telco industry
approach. In this line, it is presented a set of
business parameters that should be present in this
kind of business SLA model and could help in the
automation of SLA lifecycle processes, specially in
negotiation processes between customers and
providers. Moreaover, they are strongly
recommended to be used in B2B environements in
scenarios where customers consume multi-provider
and multi-domain products.
Further works will be focused on the concretes
parameters and values of the business terms in each
specific aspect and also in the study of new
marketplaces in which providers can co-create and
reuse services from others.
This new products will be consumed by end
customers who will not be aware of the services (and
the providers and domains involved in those
services) that may exist behind the consumed
product. However, the added value services that are
aggregated or composed from different parties, have
to guarantee the quality of service offered and have
to share the revenues and penalties that can be
triggered under different circumstances of service
consumption. Consequently and for obvious reasons,
end customers will not be aware of this dependency
and complexiy of the services.
We have to provide the novelty tools to build the
new business environments than can interact in
different marketplaces and scenarios.
ACKNOWLEDGEMENTS
The research leading to these results is partially
supported by the European Community's Seventh
Framework Programme (FP7/2001-2013) under
grant agreement no.216556.
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