Many IT teams are working ‘flat out’ just to keep the infrastructure running, and even with a state-of-the-art ITSM implementation – still can’t get beyond the basic processes of Incident, Request, Problem, and Change Management. Even in those areas, practitioners face real challenges. A lack of ownership, discipline, understanding, or ‘care’ means IT service can still seem pretty poor for the customers. Time to switch from Service Level Agreements (SLA) to Experience Level Agreements (XLA).
Infrastructure remains a major time-consuming factor even today. How refreshing would it be to proactively reduce incidents and identify trends and problems before the customer has decided they are unhappy enough with it to call the Service Desk?
Research has shown that many unsatisfactory breaks in productivity are not even reported for resolution – if the impression of IT or the Service Desk is that they are incompetent and unresponsive – the chances are the users will perform their own reboot and fix the issue themselves – whilst IT is none the wiser of issue. What would that look like in lost time and money if all of these ‘minor’ incidents were extrapolated across the employees within the organisation?
What Is A Service Level Agreement (SLA)?
According to ITIL, a Service Level Agreement (SLA) is:
“Agreement between an IT Service Provider and a Customer. The SLA describes the IT Service, documents Service Level Targets, and specifies the responsibilities of the IT Service Provider and the Customer. A single SLA may cover multiple IT Services or multiple Customers”.
Essentially, a service level agreement is an understanding between the IT service provider and the customer regarding the performance targets that are to be delivered by a service. SLAs can consist of a number of aspects such as providing the most number of service tickets.
Characteristics of a Service Level Agreement:
According to the VTT Technical Research Centre of Finland, an SLA can be characterised on the basis of:
A certain set of Key Performance Indicators (KPIs) of a service. The average values of these KPIs are estimated over a period of time or on the basis of dependability metrics such as the Mean Time To Fix (MTTF) or the Mean Time To Repair (MTTR).
A method to measure these KPIs by the hands of the customer, the provider, or both.
The penalties that can take place in case any violations of the SLA occur from either side. For example service refunds or fines.
The Problem With Service Level Agreements:
As of 2021, a significant shift has been seen in making the IT service industry more user-centric. This means that while availing service to the customers remains the most important task of an IT service provider, it has become an equally important job to look after the customer’s experience while they receive this service in order to maintain customer loyalty and growth.
What is an Experience Level Agreement (XLA)?
An Experience Level Agreement (XLA) is therefore a specially designed Service Level Agreement (SLA) which also factors in the quality levels of employee experience the customer will be guaranteed while using the provider’s services. These parameters of these quality expectations must be clearly determined, measurable, and relatable to the customer.
Why Are Experience Level Agreements Important in 2022?
A customer expects reliability and proper execution of service when they pay for it. Most IT service providers tend to overlook these two aspects that determine the quality of the service. As a result, the customer’s experience gets ignored.
Such a lack of experience for the customer results in a market gap for IT service providers to set themselves apart and get a competitive advantage in the industry and increase their customer loyalty, reputation and revenue by offering their customers a certain level of experience based on the contract the provider and the customer sign. These are Experience Level Agreements (XLAs).
Experience Level Agreements are therefore ideal for conveying the kind of expectations a customer can look forward to while using the services of the provider on the basis of employee experience.
Benefits Of Experience Level Agreements
Edge Over Competition: Most of the members of the industry already have two characteristics – They will give their best effort and their services are mostly sold at a flat rate. Those who drop their prices below the market average would admit to unprofitability in the long run. Instead, providing an experience guarantee can give you the added benefit over your competition.
Customers Willing To Pay More: Research conducted during the International Conference on Network and Service Management (2013) shows that customers are more likely to pay a higher amount for a service provided the quality of experience is high. This opens new doors for service providers who can set multi-level Experience measuring parameters for the customers at different prices.
Measuring Important Aspects Of Your Business: XLAs can help measure factors such as wasted salaries, potential issues or success levels for a recent migration project, lifespan, and performance of certain types of hardware, the number of employees who had disabled their anti-virus or malware software creating a breach of policy and security risk for the organisation, among other things.
Increased Customer Loyalty: The logic is simple. If you keep a customer happy (deliver great service as well as great experience) they are bound to stay loyal. They would return for more business in the future. Alternatively, it takes just one bad experience for the customer to lose faith. As a result, they move to your competition.
Time To Move From SLA To XLA:
What if you could see things differently? How about finding a way of collecting information from every connected endpoint on the network? How about sending real-time performance information to an engine that feeds a dashboard showing the real health of the IT estate? What if you had a tool that could overlay all the process functionality in your chosen ITSM tool? Imagine collating real-time, leading indicators and analytics about the performance of IT and the customers ‘real’ experience?
Surely this would be a step forward for service maturity giving better indicators than monthly management reports. The reports lag by one month and focus on the performance of the Service Desk against KPIs than the actual productivity experience within the business. This is the start of the next big thing. A time where Experience Level Agreements (XLAs) are given priority over Service Level Agreements (SLAs).
Learn More About Experience Level Agreements With Bright Horse:
Bright Horse delivers exclusive education courses of Experience Level Agreements. The objective is to help out customers improve their business performance. We enable you to get a competitive advantage in the IT service providers’ market through improved employee experience and engagement.
Become a part of my certified courses that are delivered by experienced professionals from the industry. We understand the direction in which the IT sector is headed, where simply providing service will not be enough.
Enrol in one of our many events and courses that take place throughout the year.