Metrics - Are we delivering the service?

Service delivery's success or lack thereof on delivering a service is based on metrics. Since I'm most familiar with IT, most people would know about Service Level Agreements, SLA's, or Operational Level Agreement, OLA's - basically, they are just fancy names for Key Performance Indicators (KPI's) which have some lever attached (a financial Penalty for not delivering, for instance). These stand for commitments to the customer, whether external or internal, that you will complete a service in a certain manner and timeliness. Service levels are meant to help the customer to see how we'll you are doing and your team of doers to see how well they are servicing their customers. And SLAs and OLAs can be based around anything definable, measurable, and tangible. You can't measure the number of happy couples leaving a counseling service, but you can measure other items like after-session surveys of customer satisfaction or how many ask for follow-up meetings within the next week.

How effective are SLAs and OLAs? Well, there is an old, management sophistical, "you get what you measure". So the effectiveness of SLAs and OLAs will be only as good as what is being measured and what measure is put in place.

For instance, if you are managing outsourced baked goods, an SLA might be "number of cakes baked every day" by your bakery. If the Service Level is set at 30 per day, you know that you need to make sure that every day you need to produce at least 30 cakes, and you know that your customer is expecting 30 per day to meet your agreement. This allows you to make sure you have resources and people enough to make those 30 cakes. Generally there might be a percentage of days where that level must be met every month, say 90%, so you know that at least 90% of he time, you need 30 cakes out every day.

The above cakes SLA does have some issues. Outsourced baking usually requires delivery to be made, or for the customer to pick up those cakes. If the SLA only measures number baked but not delivered, then you have missed the business goal of measuring, which would be for your customer to have the cakes on-hand when they are needed.

Of course, having a set number might be a bad idea, too, because demand fluctuates and as a customer, you might now be required to pay for 30 cakes a day even when there are holiday periods when you cannot use them. Maybe meeting a forecasted number of cakes where the customer send the number needed at least a week beforehand, up to 30 per day.

There are other holes in this sort of an SLA, but you can find them if you think about it, but it does make for a god example.

Now, remember, the SLA or OLA is just a tool. It's supposed to allow you to measure performance. So make sure that when you make SLAs or OLAs with your customers that you sit down with them and get some of the doers in the room with you and discuss what the customer actually wants, and then translate that into an appropriate SLA or OLA.

And also remember that pricing of your service might change based on the levels or service and types of measurements for which your customer asks, but that is not the issue with your SLAs or OLAs, that's an issue for the owner of the business nit that you work for and their negotiating team.

Just make sure you have input to those discussions or you and your customer might wind up with SLAs or OLAs that cause all of you consternation and pain for the duration of the services agreement.