Difference Between Key Performance Indicator KPI and Service Level Agreement SLA

SLA and KPI are aspects that are abbreviated as BPM of business process management. SLA means agreement on the level of service.

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Key Performance Indicator KPI vs Service Level Agreement SLA

The difference between key performance indicator KPI and service level agreement SLA is that the Key Performance Indicator (KPI) defines progress towards a strategic objective. A KPI provides an analytical framework for assessing progress towards specific goals. An SLA is a written agreement that sets out a service provided by a vendor to a client both qualitatively and quantitatively.

Key Performance Indicator KPI vs Service Level Agreement SLA

This is the tool to aid management in knowing how close or remote the team is to reach a target and enables the team to adjust itself if it is out of pace to accomplish the strategic objectives by tracking progress towards the KPIs.

An SLA is also a performance measuring tool, although it differs from a KPI. This is an agreement between a service provider, internal or external, and the entity that uses this service.

Comparison Table

Parameters of ComparisonKey Performance Indicator KPIService Level Agreement SLA
MeaningKPI is a success evaluator.SLA is a performance measuring tool.
DefineKey Performance Indicator KPI defines progress towards a strategic objective.Service level agreement SLA is a written agreement that sets out a service provided by a vendor to a client both qualitatively and quantitatively.
Featurelooks aheadconcentrate on previous performance
MeasuresPerformance measurementsIdeal measurements
Suitable forLarge organizationsPublic owned firms

What is Key Performance Indicator KPI?

KPIs are statistic used in companies to determine the vital measures for an organization’s well-being and performance.

One example is a KPI for a public-owned firm, which may differ from a KPI for a person firm in its fund-raising circle in its quarterly returns.

It is difficult to identify meaningful KPIs. The identification of KPIs suitable for the organization depends, in large part, on the organization’s measurement capabilities.

Having defined and implemented KPIs, they must be updated continuously with indicators to ensure that the measurements enhance one another and that the actions and emphasis from other goals have not been wasted.

What is Service Level Agreement SLA?

An SLA is an external or internal legal document between a service provider and its clients. SLAs fulfil quality and performance expectations in various ways, both by the supplier and the consumer.

Similarly, an SLA might be available specifically to different consumers, depending on their demands, performance towards expectations, and diverse factors.

Service loans are usually a typical solution. The service provider here provides credit to the customer for a pre-established computation in the SLA.

Details about contingencies can also be found in an SLA. These are circumstances in which an SLA ensures and assists in the application of penalties when the provisions of the agreement are violated.

Main Differences Between Key Performance Indicator KPI and Service Level Agreement SLA 

  1. KPI is the performance measurement, the SLA are the ideal measurements.
  2. SLA fulfil quality and performance expectations in various ways, both by the supplier and the consumer, whereas KPI may not fulfil quality and performance sometimes as it based on previous work.
Difference Between Key Performance Indicator KPI and Service Level Agreement SLA

References

  1. https://ieeexplore.ieee.org/abstract/document/6382487/?casa_token=0vWuhToq8tgAAAAA:IHX0c5lhasPJ3F5ntWoVC3togLyx9QUbqYd1u4JyBSMMKuZZwn8XhQAl6h3UhsPxndy_Z_sXPmc
  2. https://ieeexplore.ieee.org/abstract/document/6276255/?casa_token=AKcr__WyYscAAAAA:BWqXNvZJ4TV6KzXz1bOVAWxwxB3kFaHJiSOEGYDtxH3ZL7BCggpKvbiqZgU7sYmavWuxJzEKe7I
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