A question of service security
Ingrid Boon, facilities manager, MAF Dalkia, explains one way FM service providers can stay one step ahead of the game.
With competition hotting up in the FM sector, FM service providers need to ensure they fully understand, can adhere to and implement service level agreements (SLAs) and key performance indicators (KPIs). But what are they and how are they linked?
KPIs are quantifiable measurements that are agreed prior to job commencement. They reflect the critical success factors of an organisation and will differ depending on the company.
For example: a business KPI may be reflected by the percentage of its income that comes from return customers; a school may focus its KPIs on graduation rates of its students and customer service departments, in line with overall company KPIs, may have a percentage of customer calls answered in the first minute.
Whatever KPIs are selected, they must reflect the organisation's goals, be key to its success and they must be measurable.
KPIs are usually long-term considerations. However, the aims for a particular KPI may change as the organisation's goals change or as it gets closer to achieving its objectives.
A service level agreement (SLA) is a formal negotiated agreement between two parties. It is a contract that exists between a customer and its service provider, or between service providers.
It records the common understanding about things like services, priorities, responsibilities and guarantees, with the main purpose to agree on the level of service. For example, it may specify the levels of availability, service ability, performance, operation or other attributes of the service like billing and even penalties in the case of violation of the SLA.
Key success factors for the service delivery performance
In their contracts, service providers could propose a performance management system based on the following: SLAs; KPIs; monitoring and reporting and a risk and reward system.
The identification and development of the service levels is essential if the contract is to be successful.
SLAs will demonstrate the service providers understanding of the customer's service requirements, establish the operating parameters of each service and indicate the levels of performance to be achieved by the service provider. Each SLA should define the following:
- overview of service delivery methods;
- implementation arrangements;
- measurement criteria.
SLAs will focus on factors such as quality, customer service, compliance and business support.
Once the SLAs have been drafted and agreed with the customer, these will be incorporated into the service delivery contract agreements with the service provider company and specialist sub-contractors.
The KPIs support the SLAs and method statements with a transparent measurement regime.
They are carefully selected to reflect the delivery requirements expressed within the SLAs and provide the means by which the service delivery is measured and monitored.
Monitoring and reporting
Some service providers can use several tools to monitor the service delivery performance, compliance and customer satisfaction. For example: the helpdesk report; a computerised maintenance management system or random and scheduled inspections.
Monthly service performance reports should also be undertaken according to a format and a content that has to be agreed by both parties. The reports could include the following types of information:
- achievements for the period;
- statutory compliance against programmed works;
- maintenance tasks completed against programmed work;
- reactive response times against service level;
- calls opened/closed in the period;
- exception report for open calls.
Holistic approach to risk and reward
The payment mechanisms attached to the KPIs that measure the SLAs will encourage good performance and deter poor performance. The performance of service providers and the sub-contract service partners can be captured through the KPIs and this will directly influence remuneration, both to individual service providers and to integrated ones. Having measured performance through the KPIs, the final link in the alignment of interest will be to relate this to remuneration.