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Sun 1 Apr 2007 01:53 PM

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SLAs & business objectives

As the region struggles to keep high class standards, senior consultant of Transguard Group, Mark Wilcock, explains how service level agreements (SLAs) can have a positive impact on business objectives.

One of the greatest questions to face mankind is to do with measurement. "Is my glass half full or half empty?" Philosophically, this poses many questions such as: is it only meant to be half full? Is it in the process of being filled? Or does it really matter whether it's full or empty?

In order to fully answer these questions, we need to set up some definable parameters we can all understand and leave little room for discussion. In business and particularly in the world of facilities management, we use a system of service level agreements (SLAs) and key performance indicators (KPIs) to help answer these questions.

These terms are regularly used within FM, but do we really understand exactly what they mean and how they affect the client's business?

A service level agreement is a binding contract which formally specifies end-user expectation about the FM solution and tolerances. It is a collection of service level requirements that have been negotiated and mutually agreed upon by the information providers and the information consumers.

KPIs are financial or non-financial metrics used to reflect the critical success factors (CSF) of an organisation. These are used in business intelligence to assess the present state of a business and to prescribe the course of action. They help an organisation to measure progress towards their organisational goals.

The phrase CSF was used above and it is these ‘factors' that take us on our journey to ensure that SLAs deliver directly to the bottom line by assisting (or indeed facilitating) the business in achieving its objectives.

A critical success factor is a business event, dependency, product or other factor that, if not attained, would seriously impair the likelihood of achieving a business objective. These CSFs are derived directly from the business Key Value Drivers (KVDs). These KVDs are the top priorities identified by each company and function to carry out predefined strategic goals.

Key value drivers are therefore the precursors to service level agreements and key performance indicators.

A contractor/supplier must be able to fully understand and interpret what values drive the contract/client (as must the client himself) before they can meet and deliver to the client's current and future over-arching strategic business objectives.

As FMs there is a simple process you can follow to ensure that SLAs and KPIs are fully aligned to your customer's aims and goals. You should speak to the customer and ascertain what its KVDs are and how you can influence or add value to them. Once you have achieved this you can look at the client's business from its perspective to help form KVDs that are specific to FM.

By now it should be possible to work out exactly what is driving your client and why, and from this you can contribute to your capability to address your own KVDs.

By analysing all this with the client you can then develop specific FM solutions to meet the client's exact needs enabling you to get in behind the bid paperwork. At this stage you will have a much fuller appreciation of the client's business and can therefore start to look at what its current and future ‘pain-points' might be.

By completing this analysis you can develop your own capabilities to help alleviate that pain and hence form an end-state vision by redesigning the features of your and the client's ‘new business' capabilities.

Once the KVDs have been agreed you are then in a position to define and agree SLAs and ultimately KPIs. This should assist in demonstrating that everything the FM Company does adds real value to the client in its business operations, both now and in the future. It also gives you, as FMs, a greater feeling of ownership of the SLAs and KPIs as you will have guided your customer in defining and aligning them to achieve a win-win situation for both parties.

You will have added real value to the whole process in helping the customer to fully understand the business and how FM is key and integral to assisting in achieving his bottom line potential.

All too often as FMs, you get given SLAs and KPIs as a fait-accompli, but by using this process you can add real value and influence to the outcome of your actions by targeting your services and performance directly to the key points of the client's business.

You will have established a real partnership through mutual understanding of what drives the respective businesses and hopefully there will be no arguments in the future about how full the glass is!

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