The most critical concern of businesses considering outsourcing, according to Deloitte's Global Outsourcing and Insourcing Survey, is their ability to monitor and manage the outsourcing provider's performance effectively. In addition, attrition and cost were two primary concerns of these companies.

However, their biggest concerns for current partners of outsourcing services are poor service quality and reactive (vs. proactive) management.

Despite different highlights of concern, these results point to a lack of collaborative relationships between partners and providers.

The key to this lies in Service Level Agreements (SLA).

Some time ago, SLAs had only used to help manage supplier performance. As the industry matured and evolved, SLAs have graduated from being a quantitative measurement vehicle to one focused on addressing and resolving issues for both partner and provider. Still, there remains to be some confusion over the difference between contractual SLA metrics and the Key Performance Indicators (KPI) that business process outsourcing companies (BPOs) use.

This article will discuss the difference between the two, the importance of having them both, and what valuable SLA metrics organizations should consider as part of their contracts.

What Is An SLA?

An SLA establishes the baseline performance levels of a BPO provider. It contains the services to be provided, metrics by which they will be measured, the remedies and penalties for breach, the duties and responsibilities of both BPO provider and their partner, and instructions if amendments need be made.

The Importance of Effective SLAs with BPOs

Effective SLAs ensure that both the BPO provider and their partner understand their duties and responsibilities and focus on the right factors while laying out the proper metrics to measure service. More than that, though, a well-done SLA will help strengthen the working relationship between a BPO provider and their partner in many ways, including:

• Accountability: Holding BPO providers contractually accountable to specific and critical objectives ensures that the areas and factors the company cares about remain top priority.
• Clarity: When SLAs include the right objectives, performance assessments can be easily done because they align with the company's priorities.
• Communication: Through monthly service level reviews, stakeholders can quickly address any issues.
• Reducing Potential For Conflict: SLAs ensure both BPO providers and their partners understand their roles in supporting SLA targets. When objectives are clear to both sides, people will spend more time creating solutions than debating problems.

Well-written SLAs provide the blueprint for a successful relationship between a BPO provider and a business. They establish a clear set of rules keeping everyone on the same page. With an effective SLA, business process outsourcing providers and their partners can move forward with peace of mind knowing what to expect and effectively communicating and addressing any issues that may arise.

As your business partner, we understand how crucial it is to establish SLAs and KPIs that fit your needs. At eFlexervices, providing the services you need for optimum performance is our priority. We are a performance-driven culture. We work with our partners to determine what metrics impact the objectives they set forth most.

Once we establish the KPIs and OKRs, our seasoned management team will create bespoke scorecards that will record the measurements necessary to succeed. Agents are accountable to the scorecards as these measurements will give us a snapshot of an agent's strengths and weaknesses over time. The scorecards provide critical data in quarterly and annual performance reviews. They also help our management team identify areas of opportunity for agents; we implement improvement plans when necessary. Only agents with consistent passing grades will stay on at eFlexervices.