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10 July 2024

How to measure the effectiveness of a service level agreement?

Service Level Agreement

Here are some key ways to measure the effectiveness of a service level agreement (SLA):

Define Clear and Measurable SLA Metrics

Ensure that the SLA includes specific, quantifiable metrics that can be easily measured and tracked. Examples include uptime percentage, response times, resolution times, and customer satisfaction scores. Avoid vague terms like “reasonable” or “best effort”.

Monitor SLA Performance Regularly

Continuously monitor and report on SLA performance using reliable tools and methods. Collect, analyse and visualise data related to the agreed metrics. Communicate results transparently to customers and stakeholders, highlighting achievements, challenges and opportunities for improvement.

Track SLA Compliance

Measure the percentage of service requests that are successfully resolved within the SLA-defined timeframes. This SLA Compliance metric is a key indicator of the service provider’s ability to meet commitments. Track the total tickets, SLA-compliant tickets, and expired SLAs.

Measure Customer Satisfaction

Regularly assess customer satisfaction levels through surveys, feedback forms or other channels. Customer Satisfaction (CSAT) scores provide direct insight into how well the service is meeting customer expectations. Integrate CSAT into reports and dashboards.

Benchmark Against Industry Standards

Periodically compare SLA performance against relevant industry benchmarks, best practices or peer groups. This helps identify strengths, weaknesses, gaps and trends in service delivery. Use the results to set realistic goals and targets for continuous improvement.

Manage SLA Exceptions and Disputes

Establish clear procedures for handling exceptions and disputes related to SLA performance. Document and track incidents, outcomes and lessons learned. Ensure fair and effective management of exceptions.

By defining the right metrics, continuously monitoring performance, tracking compliance, measuring customer satisfaction, benchmarking against industry standards, and managing exceptions, organisations can effectively evaluate the success of their service level agreements. This data-driven approach enables data-driven improvements to service quality and customer experience over time.

Citations:
[1] https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID2847616_code2557434.pdf?abstractid=2847047&mirid=1 [2] https://www.top.legal/en/knowledge/sla-metrics
[3] https://www.linkedin.com/advice/0/how-do-you-measure-improve-service-level-agreement [4] https://blog.invgate.com/service-level-agreement-metrics
[5] https://westaway.com/faq/service-level-agreement-sla-why-it-matters-for-your-startup/