Performance Management: The Need for Service Level Agreement Metrics

Performance management is one of the essential parts of the service level agreement or SLA. Metrics that measure the service provider’s performance are the key determinants if the commitments specified in the SLA are indeed being met. Though selecting metrics to gauge the performance of a project is a critical step, it is still of utmost importance to choose the appropriate metrics that will drive positive results and enforce business stability.

To meet the goals in ensuring a successful and positive working relationship between the parties involved, here are things that should be considered in selecting metrics: (a) Select metrics that will motivate the right behavior; (b) Choose measurements that are achievable and easily collected; (c) Ensure metrics reflect items or factors that are within the service provider’s control; (d) Set a reasonable baseline; and (e) Avoid choosing an excessive number of metrics that may produce unnecessary data.

SLA metrics are further categorized into four, namely (a) Volume of work: number of work products or deliverables produced per unit of time; (b) Quality of work: acceptance criteria or standard compliance that cover the technical aspects, service satisfaction and availability; (c) Responsiveness: the amount of time it takes to create a product or render a service and (d) Efficiency: measures the effectiveness in providing quality service at a reasonable cost.

Though there are a lot of metrics to measure, it is but a good practice to summarize the results of each item and convert them into trends when reporting is done. An engagement will be then conducted and list down action items to achieve better results in the future.

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