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Local Authority Times Local Authority Times Vol Local Authority Times Local Authority Times Vol. 19 No 1 & 2 2015 Bi-Annual Edition ISSN No. 0791-8267 Use of Key Performance Indicators Contents 1. Use of Key Performance at review stage in Indicators at review stage in Service Level Agreements Service Level Agreements. 4. Delivering for Tipperary innovation and leadership By Orla O’Donnell, IPA 6. Search Begins for Ireland’s Best Young Entrepreneur 10. At a glance the debate As more and more local authorities use may contain multiple service level on water flouridation ‘service level agreements’ or ‘service level agreements, one for each specific task appears pretty one-sided contracts’ when outsourcing services or item, and different agreements to external organisations or providing for different aspects such as quality, 12. New Tourism Project services to other organisations, there is quantity and schedule. In addition, you opened at Malin Head an increasing use of specific metrics, also can set up an SLA between different 16. Local Government cannot known as key performance indicators departments within your company.’ be treated as internet (KPIs) during the review stages of these giants contracts. In more detail, Hiles (2000) defines a SLA as ‘an agreement between the 18. Carrigtwohill Tullagreen In this article, we will examine the support service and the user quantifying Community walkway use of key performance indicators the minimum acceptable service to opened in the review stage of service level the user.’ Hiles also notes that SLAs are agreements, including the advantages particularly useful ‘in time-critical 20. WEEE Ireland and disadvantages involved in their processing and that they may be implementation. A number of examples complex and lengthy or simple one-page are referenced in this article to highlight documents, but, are mainly seen ‘as good practice templates. indispensable to providing good service News items and sound relationships between vendor and customer.’ Pages 22-40 What are the differences Irish local leaders appointed to EU regions assembly between Key Performance For example, The Office of the Attorney Indicators (KPI) and Service General in New Zealand (2004) outline Funding allocation of Level Agreements (SLA)? that ‘the international infrastructure €2.48million for Public management manual, Creating Participation Networks Business process management uses Customer Value defines service levels as UNESCO biosphere status for a number of techniques, such as service parameters or requirements for a Dublin Bay Service Level Agreements (SLA); Key particular activity or service area against Performance Indicators (KPI) and which service performance may be Ireland’s first Advisory Operational Performance Indicators measured. Such service levels can relate Council on Climate Change appointed (OPI) to measure specific aspects of an to dimensions of, for example, quality, organisation’s business. (Wayne, 2015) quantity, reliability, responsiveness, Consultation launched on environmental acceptability, and cost.’ National Mitigation Plan A Service Level Agreement (SLA) is ‘an agreement between two parties in terms Key performance indicators (KPIs) are National Strategy to reduce lead in drinking water of a particular service. Specifically, an defined as key metrics that target the and more... SLA is defined as a contract between tactical and strategic objectives of service a service provider and a customer, it providers organisations. KPIs ‘measure a details the nature, quality, and scope supplier’s performance against business- of the service to be provided. It is also critical areas.’ referred to as a ‘service level contract’ Wayne (2015) provides a number of Wayne (2015) outlines that ‘a complete examples of KPIs: KPIS for a restaurant contract for goods and services would include tables filled, income Printed on Recycled Paper 1 per night, food costs, labour costs and legally binding.(Blackwell and Dixon, • The process for dispute resolution advertising budget. KIPS for an online 2003)’ Similarly, CIPS (2005) explain the store would include income per category difference between internal and external • A confidentiality and non-disclosure and costs for bandwidth, advertising, SLAs. ‘Internal SLAs are not intended to agreement goods sold and shipping. KPIs help have legal consequences, since customer your business succeed by keeping you and service provider are members of the • Termination conditions.’ (SpringTide up-to-date on the “vital signs” of the same organisation. There will also be no Consulting Ltd. (2010)) company.’ They measure efficiency and monetary compensation, although non- effectiveness of a service and the status of compliance may be penalised indirectly.’ In brief, ‘SLAs are about minimal, expected and agreed quality of a service operation. It is important to note service to a customer; however, KPIs are that not all metrics are automatically However, the Oakleigh Consulting white about desired operation efficiency and KPIs as KPIs are bound to organisation or paper on ‘Developing Service Level organisation goals. It is important to service goals and should drive efficiency Agreements in Local Government’, measure both service level compliance and continuous improvement. notes that effective SLAs between and key performance indicators in support and frontline delivery services order to keep promises and excel service don’t necessarily have to fit this mould. quality.’ (https://martinskemme. Furthermore, Wayne (2015) highlights It is noted that when assessing local wordpress.com/2013/05/09/sla-vs- that ‘operational performance indicators authorities’ use of resources, the local kpi-service-level-agreements-vs-key- (OPIs) are similar to KPIs in that both refer government sector needs to find the best performance-indicators/) to the vital metrics of an aspect of your ways of integrating both support and business. But while a KPI looks at broad service provider functions to provide In summary, key performance indicators (KPIs) are increasingly being used categories, an OPI measures a specific value for money to the customer. The Oakleigh Consulting white paper, in the review process of service level function or operation –typically one agreements or service contracts as a stresses that ‘in this context, the SLA at a “bottleneck” for your business. An means of gauging the progress achieved OPI for a shipping company would look can be adapted as a critical management under ‘service level agreements’ or tool, especially if it is seen as part of at the process for loading trucks, while ‘service level contracts.’ In this article, a wider performance management an OPI for a fast-food restaurant would we examined the use of key performance framework. It can lay the groundwork for measure the make process for meals.’ In indicators at the review stage of service a consistent ‘customer-driven’ approach, summary, Wayne (2015) underlines that level agreements, including the not just to the outside world but to ‘setting up systems for your business advantages and disadvantages involved the network of internal customers of in their implementation and looked at a [organisation] doesn’t mean choosing support services.’ (Oakleigh Consulting number of good practice examples. among SLA, KPI and OPI for your metrics. Ltd., White Paper) External SLAs will A strong business plan will apply all have contractual implications. It is It is evident from the international three metrics at appropriate points.’ In recommended that they are generally examples referenced in this article, particular, Wayne notes that ‘OPIs will a part of the outsourcing contract and that the service levels are achieved measure the performance of key points should be treated as a schedule (or part of successfully where the service of your operation, while KPIs will rate a schedule) to the agreement.’ ‘SLAs and level contracts stipulate specific how well your business interacts with the measurements and indicators of service KPIs are agreed with the supplier, and market. You’ll use SLAs to make sure the provision, including, ongoing reviews form an essential ingredient for effective businesses you depend on keep delivering with partner organisations to ensure Supplier Performance Management. what you need on the schedule and in the a continuous improvement in service. While Relationship Audit evaluates the quality you require.’ (Wayne, 2015) Failures occur where at the outset of overall strategic alignment of the buyer- the service level agreement, there is supplier relationship, SLAs and KPIs a lack of understanding of the level Blackwell and Dixon (2003) in their tend to focus on the operational aspects: of service to be provided by the local analysis of SLAs, stress that the key authority and the partner organisation; a difference in the use of SLAs appears to be • The service provided lack of consultation with the customer or in their application. ‘For example, service community from the outset; lack of useful level agreements can either be applied to • The level of service required indicators to benchmark service changes the provision of internal services by one and a robust review mechanism as part of an area within an organisation to another • A timeline for delivery ongoing continuous improvement strategy. (Boyd & Proctor, 1995; Bucholtz, 1999) or to the delivery/receipt of services • Responsibilities for both parties As an Attorney General’s report (2013) in New Zealand noted ‘a public entity with an external organisation (Rozwell, cannot contract out all responsibility
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