Service Level Measurements

This  article covers the steps involved in assisting sourcing teams in the understanding and development of SLAs, SLOs, and OLAs associated with their sourcing activities. Sourcing activities include both internally retained and externally out-tasked or outsourced work responsibilities. This article is applicable to both. I will use the example of an outsource decision for an IT Help Desk.

It is critical to measure not only the right things, but also at the right levels. Too high and bad of a performance in a specific area can be washed out by scale; too low, and the supplier may need to add extra staff to meet the target and/or add risk to the price, which drive up cost.

How will you, as the provider, be able to assess the performance of the supplier? Performance assessment is the process of collecting, measuring, and managing supplier performance (usually around specific service level agreements [SLAs], service level objectives [SLOs], operating level agreements [OLAs], and executive level watch items). This will let you know whether you are receiving what you expected from your supplier when you entered into the deal and allow you to correct your course during the process as necessary.

Definitions

• Operating Level Agreement (OLA) An agreement between a supplier and other suppliers or internal service providers. There are typically no …