August 12, 2020

Introduction to KPIs and SLAs

Introduction to KPIs and SLAs

Key performance indicators (KPIs) is a measurement which defines the progress of a strategic goal in the business. This provides the business with an analytical piece of evidence which can be built on to improve the business. This is an essential indicator for the business as this provides data to identify, monitor, report and evaluate current trends.


Key Principles of identifying KPI Metrics

  1. KPIs must be selected with a strategic link with business performance.
  2. There are several strategic KPIs that can be used.
  3. Limitations and assumptions should be well- considered in evaluating KPIs.
  4. Never rule out any KPI indicators, it might not be seen as useful now, however, could be instrumental in the future.

The four KPIs to drive business strategy:


1. Revenue growth

Sales growth is an essential measurement of a business’s performance; tracking of revenue allows an evaluation of peaks and downfalls of sales. This allows the business to act and make changes to improve revenue.


2. Customer Lifetime Value

CLV allows the business to value a long-term customer relationship; this performance indictor helps gain customers in a potentially crowded market. Customer loyalty is proving to become difficult, with the number of competitors available now. Therefore, this performance indicator allows the business to keep a track on this, and act on how to improve it.


3. Customer Satisfaction & Retention

Measuring Satisfaction and retention is highly useful to maintain reoccurring customers. This indicator is crucial for evaluating the customer service of the business and if it needs to improve or not.


4. Employee Satisfaction

Measuring employee satisfaction is a useful way to build on productivity and overall wellbeing in the business. This is a useful method to use feedback and to make any necessary improvements.


Service level agreements (SLAs) are used to identify the metrics used to measure the level of service provided. An SLA is critical to support the performance of operations that depend on the business’ services. SLAs are essential to the business, as it is a process to improve service quality; this quality impacts business performance and creditability.


Different Types of SLAs

There are three types of SLA structures; this is determined by what the business offers.


1. Customer-Based - an agreement with one customer, covering all the services used by the customer.

2. Multi-Level - this focuses on the organisation of the customer. All services and their interrelationships with the business are considered.                                                                                          

3. Service Level SLA - this is a business with one service for all customers.


Key principles of SLAs

  • Measure the business outcome of various SLA types
  • Service levels respond differently to business scenarios
  • Evaluating performance history with service levels
  • Incentivise continuous improvements in service levels


Our team is available to support your business in implementing SLA's - get in touch with one of our consultants.

phone: 0116 223 5887 or email: info@rdsconsultants.co.uk


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