The Importance of Being Earnest About SLAs and KPIs

You’re dealing with a new supplier. You need to draw up a Service Level Agreement, commonly referred to as an SLA.  You know you’ve got to cross every t and dot every i.  So how do you make sure that you’ve covered all bases?  How do you know that your supplier understands exactly how their service will be measured – and what happens if they fall short? You need to be earnest about the SLA – and on the ball.

The nitty gritty of SLAs.

A Service Level Agreement is a contract or Agreement which clearly defines the Level of Service to be provided by a supplier to a customer.

An SLA is usually legally binding. It should be planned thoroughly to ensure that all areas of supplier responsibility are included.

So how do you make sure that you don’t miss a crucial service element? How do you know that your expectations and your supplier’s obligations are a match made in heaven?

“Plans are of little importance, but planning is essential.”
Winston Churchill.

SLAs must be planned, and planned very carefully so that both you and your supplier know exactly the level of service that is expected.  If you don’t do this, your relationship with your supplier could go downhill, leading to poor service or even costly disputes.

When you’ve done all the planning, it’s time to look at how you’ll measure supplier performance – how you’ll know if they meet their targets and their obligations. That’s where KPIs earn their crust.

Key uses of a KPI.

Use a Key Performance Indicator to measure how well your supplier is performing, according to the terms of their SLA. For example, if your supplier has delivery targets to meet as part of their SLA, how will you measure that these delivery targets are being met?

You need to design your KPIs so that they can give a clear picture of your supplier’s performance at any time to ensure that your supplier is on track; that they are meeting all of their obligations.

Not sure where to start?

If you know what you need to do, but are not sure how you cover all bases, it’s time to call The Academy of Procurement and book into their Service Level Agreements (SLA) and Key Performance Indicators (KPI) one-day workshop.

This workshop is led by experienced facilitators, and you’ll use practical case study sessions to reinforce the processes you’ll cover.

On the agenda.

You’ll learn about:

  • Types of agreements
  • Drafting supplier obligations or expectations – and how to make them legally binding
  • Measuring supplier performance
  • The elements of Service Level Agreements
  • Key Performance Indicators

and much more.

You’ll become confident about planning and documenting Service Level Agreements and how to measure performance, all without missing a beat!

Can’t have one without the other.

Having a signed Service Level Agreement that clearly defines the performance required of your supplier is a major achievement.  But you must also have the means of measuring their performance – your Key Performance Indicators – to keep your supplier accountable.

Have a chat with us about how you can improve your SLA and KPI Capabilities through one of our training programs or our corporate E-learning.

For chalk and talk, see our open training calendar for a session, date, location and time that suits you.

Email: [email protected]

Phone +61 (03) 8547 3940

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