SLAs (Service Level Agreements) are the key elements that make every well-run operation work!
All of us in operation have heard some form or version of that statement.
Each time I hear it I roll my eyes and sigh…
Well! Most of the time I do that in my mind… but you get the idea…
Why am I rolling my eyes? Because each time someone says that I’m picturing this:
When your house is on fire, the appropriate reaction should be this:
There is NO reason to argue that “my house is on fire” should be considered as normal!
SLAs vs KPIs vs BLAs:
I know; everybody hates acronyms but Service Level Agreements, Key Performance Indicators and Business Level Agreements are all part of what should matter.
SLAs are what you need when you have to fight fires:
SLAs are designed to make sure people perform as they should when a rapid reaction is needed.
Some would argue that Service Level Agreements are dead.
I won’t go that far.
SLAs are important BUT they really matter for about 20% of the activity of your operation team: the “firefighting” part.
But we have to acknowledge the limits of SLAs:
- More often than not, when you have an SLA contract, the service providers just meet the service levels.
That’s what they do.
But that’s a problem.
They don’t meet your rapidly changing needs; they just meet the service levels, as stipulated in the contracts.
SLAs drive behaviors that are focused on delivering a minimum level of service at minimum cost to the provider.
- And if your customer only moves in your property next week why should you push so hard and spend so much to meet the standard 24 hours SLA to fix the water heating issue you’ve identified?
KPIs: your metric is NOT your goal!
Key Performance Indicators are a vital part of how you should measure your performances as a team as well as the performance of each components and members of your teams.
BUT as stated in the Goodhart’s law:
When a measure becomes a target, it ceases to be a good measure.
For more about this see the very good piece by Stuart Rance your metrics are not your goal where he argues that:
SLAs drive bad behavior while discouraging other behaviors that aren’t easily measurable.
Business Level Agreements (BLAs) is what really matters:
Back in 2008 Cap Gemini wrote a white paper about Business Level Agreements for IT.
Below if the overview for this paper:
It is a well-held business truism that measures and rewards help to change behaviors much more effectively than words and ideals.
By targeting measures at the areas where business seeks to succeed and by aligning rewards to the level of success, a company is able to align its people and partners towards its overall corporate goals.
There is, however, one area where this is consistently overlooked and where the contractual and bonus structures are based not on the company measures, but on the isolated measures of that area.
The area is IT, where the norm is for contracts based on Time and Materials, Fixed Price for delivery or Technical Service Levels for support.
With IT becoming increasingly central to the operation of a business, a new approach is needed that commits IT to business success in the same way as everyone else.
Can you think of any other area where this is also true?
A part of your organization where the norm is for contracts based on:
- Time and Materials
- Fixed Price for delivery
- Technical Service Levels for support
You’ve got it!
Operations is exactly the same as IT was back in 2008!
The Ideal world:
In order to meet your BLA in a cost effective way 80% of what operations do should be done with regular scheduled maintenance and repairs!
The missing piece – an Early Warning System:
The US has NORAD.
Because if you have ballistic missiles fitted with nuclear warheads coming your way then you REALLY want to have as much time as you can to prepare yourself and try to minimize the damages as much as possible.
Your operation organization should also have an early warning system; your own version of NORAD too.
An efficient Early Warning System:
- Enables everyone in your organization to report incidents and issues.
That’s how you can instantly transforms each of your team members into “smart sensors” and get alert every time something is amiss.
- Gives you an accurate picture of everything you need to do.
- Makes it fast and easy to prioritize and tackle important issues first.
- Allows you to solve issues and incident BEFORE customer can even complain about these.
- Reduces stress on your teams: they don’t have to fight fire all the time.
I for one would argue that:
Business Level Agreements, a good Early Warning System and SLAs are the key elements that make every well-run operation work!
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What do you think? Do you agree that focusing only on SLAs is a BAD idea? Share your thoughts and comment!