Understanding the Differences Between KPIs and SLAs
KPIs and SLAs – working in facility operations and management, there is no doubt you have heard these terms before, maybe more than you would like. But, have you stopped to consider what the differences are between the two? While intertwined, key performance indicators (KPIs) and service level agreements (SLAs) have critical differences as they relate to business efficiency and performance, both internally and externally. Here, the in-building logistics professionals at SCLogic discuss how KPIs and SLAs differ, best practices for utilizing each, and how our facilities workflow platform, Intra, provides a myriad of solutions to help your organization achieve maximum efficiency amongst departments.
What Are Key Performance Indicators (KPIs)?
Before enacting any strategy related to your KPIs or SLAs, you should first understand what makes each of these items successful. In short, KPIs refer to performance indicators that are progressing toward strategic results previously outlined by your organization. Through comparison, measurement, and adjustment over time (monthly, quarterly, semi-annually, annually), KPIs provide extensive insight into your business’ internal health, workflows, and progress toward organizational goals.
It is important to note that KPIs are not a “one size fits all” measurement and will differ amongst industries and even departments within the same company. For example, the KPIs an office manager tracks will vary significantly from that of a healthcare facilities manager. Office managers may set a primary focus on meeting room scheduling and visitor tracking, especially during the novel coronavirus pandemic. In contrast, a healthcare facilities manager may emphasize misplaced or misdelivered packages. As the corporate landscape continues to change, organizations must find a way to adapt. KPIs provide a concrete path toward operational excellence, helping you identify gaps and strategize solutions effectively.
What Are Service-Level Agreements (SLAs)?
While similar to KPIs, SLAs relate to agreed-upon levels of service, generally between the service provider and the end-user, or vendor to customer. An SLA is used to measure the level of services provided and typically includes the metrics used to measure the service provider’s success and penalties accrued if the service provider fails to meet the minimum service level promised to the end-user.
SLAs are vital for all end users, as they provide a comprehensive overview of expectations and protocols. Most SLAs will include information on the specific services offered, the quality and timing of these services, performance reporting measures, customer service protocols, and penalties for non-compliance. There are three standard formats of SLAs, including service-based, customer-based, and multi-level.
- Service-Based SLA: An agreement between the customer and service provider regarding service expectations. This is the most generic form of SLAs, providing overarching service terms.
- Customer-Based SLA: A more detailed version of the service-based SLA, customized to the end user’s unique service needs and requests.
- Multi-Level SLA: A multi-level SLA is most beneficial for larger organizations in which different customer groups will be using the same product or service. This SLA provides a detailed outline of service expectations for each customer group within one agreement.
Why Should You Have Both KPIs and SLAs?
KPIs and SLAs are not mutually inclusive. However, utilizing one without the other will decrease efficiency and make it more challenging to monitor and adjust your business practices as needed. In short, SLAs provide information on the minimum level of service offered to the end-user, while KPIs reference the effectiveness and efficiency of that service. For example, an SLA given to a customer may state that the average delivery time for a package is three days, and refunds will be provided if deliveries are later than four days. However, your business’ KPI for turnaround time may show that you average a delivery time of two days. Because you have accurate data on these KPIs, this allows you to return to your end-users with useful metrics that may result in a renewal or contract increase, providing additional revenue for you and satisfying customer relationships.
How Does SCLogic’s Intra Software Provide Solutions?
The modern workplace is constantly changing, and we ultimately have two choices: move forward with innovative thinking or remain static in traditional business practices. At SCLogic, we provide configurable solutions through our cutting-edge in-building logistics platform, Intra. From assisting office managers in reporting and visitor management to providing curbside pickup workflows to facilitate safe package delivery, we provide dynamic solutions and powerful results to organizations of any size. We prioritize continuously seeking new technology while fostering meaningful relationships as we craft custom facilities management solutions suited to your needs.
Interested in learning more? Contact our team at [email protected], or request a demo today! We look forward to hearing from you.