Operating a residential development is no easy task. The cost and logistics of keeping track of all your assets, amenities and contracts can be overwhelming, which is why it’s important that all external providers follow SLAs and work inline with your company KPIs.
With agreements in place, you can determine how much value a vendor is providing. Below, we explore what KPIs and SLAs are, how to set your own and how they work in real-world situations.
What are KPIs and SLAs?
KPIs and SLAs are how you define and measure value from a service or product.
SLA is short for Service Level Agreement, which is a documented agreement between a vendor and their customer. An SLA is used to manage expectations by listing what each party is responsible for during the length of a contract. Some key points to cover in an SLA include:
- Scope of work
- Costs & payment schedules
- Termination clauses
KPI stands for Key Performance Indicator, and it gauges how well a service provider is performing against the standards agreed to in the SLA. As an example, let’s say you have a contract with an external lift maintenance company. As part of the SLA, both parties agree that the maintenance company will inspect the lifts in your building once every three months as a minimum.
The KPI in this situation is how many times did the company come to inspect the lifts. If they carry out inspections four times a year, then they have hit the KPI and are providing you with the value paid for. Any less, and you will need to hold them to their SLA or they will risk losing your patronage.
Implementing Company KPIs & SLAs With Your Suppliers
Before setting SLAs and KPIs, it’s important to gain an overview of everything that your building uses and needs to run efficiently. Two aspects that will help in this situation are:
- An asset register
- A contract database
The asset register lists all the equipment installed in your building and provides key details such as:
- The asset (eg. boiler, smoke alarm, lift)
- Make and model numbers
- The location of the asset
- Date installed
A contract database provides an overview of all your current contracts including:
- How much you’re paying
- When the next inspection is due
- Automatic renewal dates
Setting SLAs and KPIs
The data logged in your asset register and contract database will help you make more informed decisions, so you can set SLAs and KPIs that work for you.
Your current data should act as a baseline. See how well your development is performing with your existing structure in place and amend accordingly.
Going back to our lift maintenance example, let’s say the external company is hitting its KPIs, but you have to call them out at least one extra time in every three-month period. You can then go to the company and ask to revise the SLA, or you can open your requirements to tender.
By splitting assets into procurement lots and running competitive tender exercises, it makes sourcing the most reliable and cost-effective maintenance services a much easier task. Vendors will already have all the information they need, so they can choose to place a bid based on key factors such as having the capacity to complete the work.
Putting Theory into Practice
Implementing company KPIs and SLAs with suppliers is a specialty of ours at Fjeld Consulting. One of our clients approached us to see if we could collect, track and monitor a wide range of vendor contracts, while evaluating the performance KPIs and contract effectiveness. Here’s how we did it:
- Fjeld Consulting collected, scanned and catalogued every contract to document important information such as retained budgets and key renewal dates.
- We condensed extensive 40+ page contracts into “one-page cheat sheets” for property managers, making sure the most important information was always at hand.
- The property asset registers were standardised.
- All the information was loaded into a bespoke cloud database with real time access for the property manager.
- We requested our client’s current key services providers to supply us with a standardised Excel report. Service providers included: security, internet, mechanical, lifts, concierge services, parcel tracking, debt recovery, fire security systems, parking and laundry rooms.
- All the data was loaded into the cloud based storage alongside useful reports with drill-down capability.
- Automatic alerts were then set up for key dates on each contract.
What Were the Results?
Fjeld Consulting more than delivered on our client’s needs. The end result was a bespoke report suite and business intelligence interface, which was used to vastly improve call-out response times from vendors and saved our client thousands of pounds each year.
Greater clarity also revealed that one property under the company brand had been underpaid on revenue share, and they were able to collect £12,000 of short paid income.
Stay in Control of your Company KPIs and SLAs
The hardest part of staying in control of your Service Level Agreements and Key Performance Indicators usually comes from not having a system in place.
With Fjeld Consulting’s range of software and our extensive experience in the residential sector both here and the US, we can give you the tools to ensure you’re always in control of your company KPIs and SLAs.
To learn more about how we can help, reach out to a member of our team.