Knowing how to measure service level agreement methods is necessary for any business professional. There are significant differences between SLAs and KPIs, and understanding those differences will help ensure your organization and your relationship with customers is maintained optimally.

What Is an SLA?

A Service Level Agreement, or SLA, is an agreement in plain language between you and your customer. This can be an internal or external customer. It will define the services that will be delivered by you, the responsiveness that can be expected by the other party, and how the performance will be measured.

What's the Difference Between an SLA vs. KPI?

An SLA is a type of agreement between your customer and yourself that spells out how the relationship will work moving forward. KPI, or Key Performance Indicators, are metrics that will gauge how well a team performs against other specific standards.

SLA tracking can be difficult, and making changes to it is even more difficult. Many IT managers will have to extract a lot of raw data to see how well they are performing against SLA. They will also have to write custom queries and create specialized formulas in Excel. In addition, the SLAs have to be custom-coded into the service desk. This can take many days to make any changes.

It is important to remember that SLAs are not always in alignment with the priorities of a business. They often change at the same rate of time as a business does. If an SLA was set ten years ago and is still honored today, it can be frustrating since no changes were made.

There is little to no flexibility in reporting, and although there are many circumstances that are unique to attaining SLAs, many SLA reports will not account for them easily. You can either meet your SLA or not. There is not a way to highlight a portion of something in a report to explain why or how you can improve.

SLAs have to contain quantitative measurements that do the following:

  • Represent the state of a service that is mutually agreed to
  • Provide any boundaries of a service
  • Describe the minimal service performance

KPI metrics measure:

  • The effectiveness and efficiency of a service
  • The status of service operation

Not all metrics will automatically become KPIs. They have to bound the service goals of the organization to continually improve it.

If you have a lot of customers for a service, SLAs can vary from each one. KPIs are typically standard for a service to all customers. SLAs refer to the minimal and expected quality of a service provided to customers. KPIs refer to the goals of operation efficiency and organization.

It is crucial to measure both of these service levels to increase service level quality and keep promises made.

Revisiting SLAs

To ensure that you are not only measuring the correct things but are also meeting expectations in other parts of the business, it is best to go over your SLAs at least one time every year.

You need to set a baseline. The best way to do this is by looking at the SLAs you have in place now and your performance against them. Go over what you will offer and how it measures against the goals of your company and for your customers.

Ask your customers how you are doing in their eyes. Speak with them directly and ask for any constructive feedback. Ask what you are doing right and what you could be doing better. Also, ask if you are offering the services they need.

You can then begin to build a new draft of SLAs based on these components. Remove services you no longer use and include those that will improve the happiness of your customers and add value to the business.

Also, get the support you need from your management team. To be successful, all SLAs need to be approved by your IT team leaders as well as the leaders of your organization customers. You can start by getting your own management to agree and have them work with the management teams of your customers.

If you need help with how to measure a Service Level Agreement, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law, and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.