A service level agreement (SLA), which is an important aspect of business consulting, is used often between a firm’s internal operations as well as its customers. It outlines the requirements for each party to reach their goals and provides an avenue for reporting on these goals as well as any issues that arise.
SLAs protect both the end user and the service provider by establishing standards, targets and consequences for meeting or not meeting those expectations. SLAs also allow businesses to create key performance metrics that can be used to identify areas that do not meet their strategic goals.
The SLA will define all services that are covered in a particular contract, along with any exclusions and details on turnaround times. The contract should also specify a list metrics that will be used by the service provider to measure their performance.
Metrics that are easy to collect should be chosen to reflect factors that are under the reasonable control of the service provider. They should also have a reasonable starting point so that they may be refined over the course of time.
KPIs are metrics that measure how well an organization is performing with respect to its primary goals. It can help the business determine whether it is veering off course, which is a problem that is common with small businesses.