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Understand the Difference between SLAs and KPIs

SLA vs KPI: Service Level Agreements vs. Key Performance Indicators

Understand the Difference between SLAs and KPIs

Image courtesy of [renjith krishnan] / FreeDigitalPhotos.net

What is the difference between Service Level Agreement measurements and Key Performance Indicators? Well, although sometimes they are referred to as synonyms, there are a few differences.

Service Level Agreement (SLA) is an agreement between two parties regarding a particular service. Apparently SLA must contain quantitative measurements that:

  • Represent a desired and mutually agreed state of a service
  • Provide additional boundaries of a service scope (in addition to the agreement itself)
  • Describe agreed and guaranteed minimal service performance

On the other hand Key Performance Indicators (KPIs) are metrics that target service providers organization objectives – both tactical and strategic. Usually these metrics are used to measure:

  • Efficiency and effectiveness of a service
  • Service operation status.

It should be noted that not all metrics automatically become Key Performance Indicators. KPIs must be bound to the organization or service goals and must drive continuous improvement and efficiency.

If you have many customers for a service then SLAs may vary from customer to customer; however KPIs usually are common for a service.

Let us take a few examples that outline the differences. Consider a help desk service.

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