The advantages and disadvantages of SLA and KPI in facility services

SLA and KPI are on the rise in the facility services industry. We would like to explain the meaning, the use and the advantages.

SLA: what is that?

SLA stands for Service Level Agreement. It is an agreement between a company and its supplier, in this case a facility services provider such as Multi Masters Group. In this agreement, both parties shape their partnership. They agree on what the customer expects from the facility services and what efforts the service provider will make to meet this expectation.

The advantages and disadvantages of the use of SLA and KPI in the facility services industry.

KPI: what is that?

These agreements must of course be followed up and evaluated. We link a KPI, a Key Performance Indicator, to each part of the SLA. A Key Performance Indicator is a unit of measurement on which the client and the facility services provider base their assessment of whether the service is meeting expectations.

A standard is set for each KPI. This is a value that must be met or not exceeded. This value can therefore be both a minimum (e.g. quality level) and a maximum (e.g. number of remarks per month).

In which sectors are SLA and KPI common?

The ICT sector is the most familiar with SLA and KPI. In recent years they have become more common in healthcare, security, logistics and facility services.

How are SLA and KPI established?

As said, an SLA is an agreement. SLA and KPI are therefore established in mutual consultation between the parties involved. They create a win-win situation for everyone. The contractor gets a clear picture of the client’s expectations. The client can monitor the activities of the facilities service provider in all transparency.

When drawing up a Service Level Agreement and the associated Key Performance Indicators, the SMART principle is often used.

  • Specific: formulated unambiguously and as concretely as possible, no room for interpretation.
  • Measurable: the result can be measured.
  • Acceptable: the objective must be relevant and accepted by all stakeholders.
  • Realistic: being ambitious is allowed, but the ambitions must be achievable.
  • Time-bound: determine a frequency or deadline.

What if the SLA and the KPI are ready?

Then the real work starts. A good follow-up is crucial. If there is no follow-up, the SLA and the KPI are completely useless. The company and the facility services provider agree on a schedule for the follow-up. For example: a clear report by the contractor during the monthly or bi-monthly evaluation meetings.

SLA and KPI are not for ever. It can do no harm to question them from time to time. If a company’s focus shifts, it may also be necessary to adjust the agreements with the facility services provider. Service Level Agreement and Key Performance Indicators may therefore be subject to change. It is important, however, that both parties agree to these changes.

Examples of SLA and KPI in the facility services sector

They are becoming increasingly common in the facility services sector. A few examples:

  • SLA: frequent consultation between service provider and customer.
    KPI: minimum of one meeting per month between service provider and customer.
  • SLA: training of the staff of the facility services provider.
    KPI: we make the training certificate of each employee available via Multidesk, the digital communication and monitoring system.
  • SLA: 24/7 response in the event of a calamity at the client’s premises.
    KPI: 100% response within 1 hour by a manager of the facility services provider.
  • SLA: desired quality level of cleaning.
    KPI: minimum score per quality control (e.g. 85%) and/or per type of area (e.g. sanitary area: 90%, administrative area: 85%,…).

Advantages of using SLA and KPI in the facility services industry

One of the biggest advantages of SLA and KPI in facilities management is clarity. In a Service Level Agreement and the accompanying Key Performance Indicators, the client clearly indicates his expectations. The service provider in turn indicates how he will meet these expectations. In this way, both partners know what to expect. This clarity ensures that the follow-up and reporting run smoothly and clearly.

Moreover, an SLA creates mutual trust. A transparent communication about expectations and performance ensures a good feeling on both sides. This is how they lay the foundations for a durable partnership.

Are there any disadvantages?

Not really, unless the Service Level Agreement is imposed from one side. Companies that have had a bad experience don’t want to hit the same rock twice. They then try to impose an extensive SLA – often including a series of penalty clauses – on the new facility services provider so that they are fully covered. In this way, however, it is no longer an ‘agreement’. If both parties come to an agreement as true partners, SLA can only be a good thing for all parties.

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