It may be hard to believe, but the term “experience economy” is nothing new. The term was first mentioned in this 1998 Harvard Business Review article. In the article, the authors posited that an experience occurs when a company intentionally uses services as the stage, and goods as props, to engage individual customers in a way that creates a memorable event. In other words, it’s not enough to have great products and services; it’s the experience of the customer that differentiates companies from their competition.
Fast forward to today, and these “memorable events” have become a significant factor in today’s employee-employer relationship, broadly known as employee experience (EX). Companies providing a good EX can attract and retain top talent, deliver better experiences to their customers, and have employees who are more committed to the company.
What is the experience like when employees are interacting with technologies and services within your company? Is your organization actively measuring and improving those experiences? Is your company committed to a great employee experience?
These are answers that an XLA, or Experience Level Agreement, will reveal.
XLAs provide a different perspective
In IT, there is a tendency to focus on and measure things like technology performance and process execution. Often there is little attention given to how end users perceive the quality and effectiveness of technologies, apart from when an end user reports an incident or makes a service request.
An XLA provides a different perspective. An XLA provides focus to end-users’ experience and needs, by measuring the outcomes and the value of services provided. An XLA seeks to understand how end users feel about their interactions with technology and with those with whom they interact during those interactions.
By understanding the experience, organizations can identify where measures reported by IT do not reflect the end user experience. Understanding the experience also helps identify potential areas for improvement, whether that be with a service, a product, a process, or any other aspect that the end user leverages to get their jobs done.
XLAs are becoming increasingly popular as employers realize that good EX is essential for business success. ” This article from reworked.co discusses the impact of a positive EX:
- 23% higher profitability
- 28% reduction in theft
- 81% reduction in absenteeism
- 41% reduction in quality defects
- 64% reduction in safety incidents
Clearly, good EX is good business.
XLA vs. SLA
So, what’s the difference between an XLA and an SLA, or Service Level Agreement?
An XLA focuses on happiness and productivity metrics from the end-user perspective.[i] XLAs focuses on measuring the quality of the user experience, rather than just technical metrics like uptime or response times.
An SLA is an artifact of many ITSM (IT Service Management) adoptions. An SLA, as described by ITIL®[ii], is a documented agreement between a service provider (typically IT) and a customer that identifies both services required and the expected level of service.[iii] SLAs are intended to manage expectations and ensure both IT and non-IT parts of the organization understand their responsibilities. SLAs should also provide a framework for measuring performance and holding the provider (IT) accountable if they fail to meet their commitments.
SLAs are managed by the service level management practice, which is typically found within IT departments. The purpose of service level management is to set clear, business-based targets for service levels, and ensure that delivery of services is properly assessed, monitored, and managed against these targets. [iv] The SLAs produced should relate to defined business outcomes and not simply operational metrics.
An XLA is not meant to replace an SLA but work alongside SLAs to ensure a holistic view of value and results from the use of IT services.
But wait, isn’t quantifying, reviewing, and discussing business value and results part of SLAs and service level management?
Well, yes. But most organizations that claim to have SLAs, really don’t have SLAs.
The problem with most SLAs
What many companies are calling “SLAs” fall far short of being a service level agreement. Why?
- Services are not defined and agreed. What and how IT services enable or facilitate business results and business value have not been defined and agreed between IT and non-IT senior managers. Furthering the confusion, what many IT organizations call a “service catalog” only describes technologies and service actions that consumers can request, not business value and outcomes.
- The so-called “SLA” discusses IT, not the organization. SLAs discuss IT operational performance – typically related to only the service desk – and not business performance. Indeed, many of the issues related to SLAs (for example, the Watermelon Effect) are as a direct result of ITSM tools using the term “service level agreement” as a misnomer for business performance target
- IT arbitrarily decides its own performance and success metrics. And these metrics are either measures that an ITSM platform administrator used in her last job, or metrics pre-configured within the ITSM platform, or metrics that a senior IT leader picked. Regardless, these performance measures are usually not relevant to anyone in the organization outside of IT.
- Organizations (including both IT and non-IT leaders) take the wrong approach to SLA. Neither service providers (IT) nor service customers (non-IT managers) invest the time and effort to define services, the relationship and expectations between IT and the non-IT parts of the organization, and agree on business-relevant terms and performance measures. As a result, there is no shared, mutual understanding established regarding the use and importance of technology within the organization.
Close the gaps between SLA and XLA
Understanding how technologies and processes enable business outcomes, as well as what the organization – and the employee – truly value, is critical for a good EX within today’s organizations.
If XLA adoption reveals EX challenges, closing the gaps between SLAs and XLAs will help. Here are some things to try.
- Define services – in business, not IT terms. Clearly defining and agreeing IT services between IT and non-IT leaders, including service-specific performance measures. Mutual understanding of business value and outcomes from the use of services is foundational for good EX.
- Apply Design Thinking. Design thinking is a human-focused method of problem-solving that prioritizes the solution instead of the problem. Identify where EX is falling short, then apply design thinking techniques to redesign the experience to meet both the employee’s and employer’s needs.
- Are your SLAs really SLAs? If SLAs aren’t documented or agreed with non-IT leaders, or SLAs do not identify clear, business-based measures for quantifying success, then you don’t have SLAs. Treat this as an opportunity to build good business relationships and establish true SLAs, resulting in better business outcomes and EX.
While XLA adoption can be a real revelation for an organization, it is not a magic wand for instantly improving EX. Like SLAs, XLAs can only be effective through collaboration, leadership, and having a continual improvement mindset across the entire organization. Resolving the gaps between SLAs and XLAs will help.
[i] https://www.happysignals.com/the-practical-guide-to-experience-level-agreements-xlas
[ii] ITIL is a registered trademark of AXELOS Limited.
[iii] ITIL Foundation: ITIL 4 Edition. Norwich: TSO (2019)
[iv] Ibid.
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