Is SLA misunderstood?

Businesses maintain service relationships with their customers based on agreed upon service levels. So, what is a Service Level Agreement (SLA)? An SLA is an agreement between the service provider and customers to define key service targets and responsibilities. It is the onus of the service provider to meet the agreed service levels in order to avoid penalties specified in the SLA. There is another notorious definition of SLA. Secrets, Lies, and Assumption. While it is good to set a clear expectation, many businesses have gotten this SLA policy fundamentally wrong. Let’s discuss what’s broken and how to fix them.

Why is SLA outdated?


SLA is transactional

SLA does not guarantee customer satisfaction. Meeting SLA target doesn’t ensure that the customer is happy. Customer experience is often ignored while meeting the SLA. There are two important criteria that are missing in technical SLA:

    • Service Quality – Depends on uptime, the accuracy of resolution provided and likeliness of issue recurrence in the future  
    • Service Experience – CSAT survey helps in understanding the satisfaction level

Imagine you are flying in business class. Aircraft takes off on time and you get all the amenities as promised. But what happens if the airline crew fails to deliver the expected experience and behave differently? This spoils the whole purpose of buying a business class ticket. Similarly, businesses can deliver services on time, provide 99% uptime yet fail to satisfy the customer.  


Source: HappySignals


SLA doesn’t reflect business priorities

SLAs are considered as a thumb rule which doesn’t realize business changes. When SLA rules are not aligned with business goals, it is a wrong measurement to consider. We tend to follow this blindly without factoring changing business trends. SLA often forgets the fundamental purpose of an IT function or a service desk i.e. true customer value. Service desk team often operates independently and there is no sync with the management. Continuous improvement to SLA is essential to stay relevant and therefore, create a focus group to review this periodically with the management.

    • Continuous improvement to your SLA is a must
    • Adapt your SLA based on business goals

SLA drives wrong behavior

Metrics drive behavior and SLA might drive a wrong behavior of developing a blame culture. Incidents might get re-assigned to multiple people in order to avoid SLA escalation. Service desk agents miss out on providing an accurate solution and rather deliver a hasty First Contact Resolution (FCR). SLA creates a rigid environment being static over time and this becomes counterproductive to the overall business agility. Identifying the root cause of the problem is often overlooked in the objective of meeting the SLA. Whenever SLA is considered as a KPI, it creates an aggressive behavior among service desk agents. Developing a strategic relationship with customers becomes tough with a rigid SLA policy.

    • Don’t measure SLA as your KPI
    • Combination of SLA with CSAT is a better alternative

According to the following SDI report, there is an increased focus on customer satisfaction measure as an indicator to service desk success.


Source: SDI

SLA is distracting

As this is a time-based measurement, agents tend to act faster and speed compromises on quality, the practice of documentation and so on. Service desk agents tend to find loopholes to resolve tickets as fast as possible. There are many third-party dependencies in meeting the SLA. Therefore, the service desk solution should be able to attribute these external factors while setting up an SLA. SLA applies mostly to fire-fighting activities and doesn’t factor in proactive support to keep customers happy. SLA often misunderstands the primary vision of an IT function.

According to Goodhart’s law in economics “When a measure becomes a target, it ceases to be a good measure.”

This applies well to IT teams as they start manipulating SLAs when it is enforced as a KPI. Higher priority incidents may be missed while running to meet the SLA. Agents should not be blamed here! The onus lies on the management to analyze and set up the right metrics. 


What’s Next? XLA is here!

SLAs are not dead. But, SLAs take only the technology-centric view of the service. Traditional SLAs have to be replaced with a modern approach that includes customer experience. Everyone needs a committed agreement to do business. However, customers require something beyond or in addition to SLA. Here comes the new kid on the block called XLA, Experience Level Agreement, which places customer experience ahead of all. XLA focuses on customer satisfaction and it includes both hard and soft data. Nobody remembers the committed SLA when we face a critical issue. Therefore, customer experience takes precedence over hard technical data. You may call this however you want to but it’s crucial to understand what that means. XLA insists on continuous improvement and revisions as opposed to SLA. The key takeaway is that we modify the existing SLA practice to factor in customer experience. Embrace XLA, Experience Level Agreement along with SLA.

The shift is happening! From technology-centric to user-centric; Inside-out to Outside-in practice! Let us set up metrics that matter to us! Click To Tweet

Cover Image by Nidhi Shah