1. Defining Service Levels with Key Performance Indicators
2. Service Level Monitoring

Service level monitoring and reporting refers to the processes by which the level of service as stipulated in a service level agreement, or SLA, will be supervised and recorded to ensure compliance with the stated terms of the contract.

This monitoring and reporting may be done by the contracting company or a third party that specializes in such activity. It is useful insofar as it is another means by which the contractor may be incentivized to maintain their end of the contract. It also allows the contracting party to know if the contractor has fallen below, met, or exceeded the stated goals, which may yield agreed upon penalties or bonuses.

Defining Service Levels with Key Performance Indicators

Service level agreements are contracts that determine the base standard of service a contracting party will be given by a contractor. In order to ensure that these standards are met, methodologies and criteria for measuring will have to be defined. To do so, a key element will be the use of metrics and key performance indicators (KPIs), which are measurable values used to determine service levels. These may include:

  • Process metrics, which inform the contractor and customer of the effectiveness and efficiency of key actions done while delivering service. These may include metrics that measure accuracy, consistency, and predictability.
  • Technology metrics, which provide efficiency data on the component level, which in turn allow for technical deficiencies to be identified and, ideally, corrected. These may include capability rate, change request cycle time, and defect density.

When selecting what KPIs to use to measure service levels in your service level agreement, it must be recognized that, as far as the contracting party is concerned, how the service levels are achieved is not of as great of a concern as them being achieved. To that end, KPIs should generally be less focused on measuring technical aspects and more focused on measuring:

  • How performance is enhanced.
  • The availability and reliability of the service.
  • The security of the service (as security breaches can affect availability).
  • The continuity of the service (the length and frequency of downtime).

In addition, one should also consider how a metric can be measured, how often it can be measured, and whether its measurement is objective (based on quantifiable data) or subjective (based on opinion). Of these two, objective is preferable since there is less possibility for dispute.

Service Level Monitoring

Bringing service level monitoring to your organization is a six-step process, the steps of which are:

  1. Considering the Technical Constraints and Goals. In order to fashion a reasonable system for measuring service levels, it is important to realize what is realistically possible as far as service is concerned. In this sense, technical metrics do have a role to play in consideration of service levels. Aspects to consider in this stage include jitter, delay, scalability, and response time.
  2. Determining Availability Budget. The availability budget is the theoretical network availability between two defined points. This can be determined by analyzing software availability, hardware availability, power availability, environmental factors, the possibility of carrier or link failure, and network design.
  3. Creating Application Profiles. Application profiles are systems and services that help implement service or measure service levels. These could include web browsers, e-mail systems, file transfer systems, data gathering systems, and network backup. These systems also help document service levels for measuring service metrics.
  4. Defining the Performance and Availability Standards. The standards by which service level success will be measured are integral to a service level agreement and therefore should be specifically defined. Methods of measuring these may include ASA (average speed to answer), TAT (turnaround time), and MTTR (mean time to answer).
  5. Creating and Signing a Contract. A service level agreement is a contract that will make adherence to the agreed-upon service levels binding and is necessary for enforcing the service levels. This process will involve negotiating terms with a service provider, setting them out in writing, and then having the parties involved sign and date the written document.
  6. Monitoring and Measuring Service Levels. Once the contract is drawn up and agreed to, the measurement methods will have to be put into effect. This monitoring should be done consistently and thoroughly, and any deviation from the agreed-upon standards should be noted, lest the contract and the work put into it have little practical purpose or meaning.

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