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SLAs / KPIs / OLAs
By Margaret Pitt-Jones, Senior Consultant, Alsbridge Plc

Irreversible breakdown in relations, loss of reputation, financial penalties, services taken back in house and termination of contract. These are just some of the outcomes can occur when clients and service providers agree to poorly worded, unclear and unfair Service Level Agreements (SLAs) and Key Performance Indicators (KPIs).

The critical nature of SLAs, KPIs and Operating Level Agreements (OLAs) and their effectiveness is all too often undervalued. SLAs, KPIs and OLAs are easily 'glossed over' during the sales and contracting process and not dealt with in sufficient detail or in a timely manner. Once services have transitioned to the outsourcing provider and work is in 'business as usual' the reality of agreeing to 'skim over' this section of the contract really comes to light.

SLAs, KPIs and OLAs are widely accepted as the best way to manage on-going outsourced services, however, it is alarming that whilst most managers have a general idea of there purpose many don't really understand the difference between them nor appreciate the significance of getting them wrong.

So what are the unglamorous "just do it" things which a client should focus on to make sure the deal they contract for actually gets delivered? Certainly the following:

What are SLAs, KPIs and OLAs?

A Service Level Agreement (SLA) is a formal negotiated agreement which defines parameters and responsibilities for the delivery of a service. A good SLA will stipulate:

• The exact service that the contractor will provide to the client in a clear and accurate way
• The timeframes in which the service will be delivered
• The quality and standard of service that is expected
• The framework intended to measure performance

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