Experience Level Agreements (XLAs): Defining the Workplace of Tomorrow

‘Experience’ is not just another buzzword. It has become a benchmark to weigh options for people. Everyone expects the same level of experience in all aspects of life as a customer or an employee. Experience has taken a whole new meaning in the post-pandemic world with hybrid work models, the great resignation, and talent wars. So, what can be done to adopt experience-centricity in the very DNA of a business? The answer is simple: change the most basic understanding of measuring outcomes. In other words, change how you design your service agreements (internal or external).

Why do Service Level Agreements (SLAs) need an upgrade?

SLAs are contracts that define the products/services to be delivered, the point of contact for employee problems, and the metrics by which the effectiveness of a process is to be monitored and approved. However, defining parameters like percentage capacity utilization, responsibilities of a provider, scope of work, and other minimum viable delivery metrics do not suffice today. The reasons are many: such KPIs often fail to convey IT service management’s (ITSM’s) contribution to business outcomes, the agreements are not calibrated to leverage end-user feedback, and they do not necessarily offer actionable insights for any of the parties.

To add value by focusing on business outcomes and not just providing services, enterprises need to bridge the gap between IT and business, map KPIs to observable outcomes, and avoid the classic watermelon effect where a ‘red’ service can appear to be ‘green’ simply, by taking employee experiences into account. Additionally, there needs to be an outlook shift with the employee experience in mind. Instead of penalizing below-the-benchmark achievements, enterprises must choose to reward exceptional performances.

Now is the time to measure what really matters

85% of executives believe engaged employees deliver better results and higher revenues. Moreover, monitoring progress and productivity in the post-pandemic world is paramount. The business cycle is shifting from cost optimization to productivity gains and human-centric designs. When the world is changing gears swiftly, and expectations are off the charts, quantifying technical performance is even less than the bare minimum.

Imagine an onboarding process. A tech-savvy employee driven and excited to deliver their best gets all the systems and assets to commence delivering value. When stuck with a technical roadblock, they resolve IT issues on their own end. But if the self-help desk is obsolete and slow, their problems might start from the first day. The issue gets resolved only after dampening their enthusiasm, eroding the work-life balance, and gradually pushing them to switch to organizations with a more employee-centric work culture. In this case, SLAs will record the response time instead of the impact on the workload or the employee's feedback. The onboarding takes longer than necessary because the exact attributes of productivity are not listed.

Today’s agile, lean, and multidisciplinary business landscape and the changing global dynamics call for Experience Level Agreements (XLAs) to measure indicators of the employee experience. A well-rounded XLA accurately reflects experiences and satisfaction levels that can help understand and improve service value. It can help the management leverage technology to improve the user journey.

Top four recommendations to switch from SLAs to XLAs

SLAs are time-tested and understood by all, making amending them difficult at any scale. The know-how associated with SLAs makes it challenging to move it after decades of standardization, domain talent, and platforms geared towards SLA-based KPIs. To add to that, a change in agreements involves rethinking people, resources, tools, and technology which is the last thing needed when we just readjusted to the new normal.

Additionally, the shift towards experience-centric, outcome-based agreements that make sense for all the parties involved is complex. There are also some behavioral challenges associated with the adoption of XLAs. For example, customer experience is very subjective. As people tend to predominantly provide feedback when they face a bad experience, it can lead to skewed results. Hence, the sample size of feedback gathered must be large enough to do any analysis. This is why crafting XLA KPIs beyond sentiment analytics is important in developing an XLA maturity model.

To overcome these roadblocks, here are the key recommendations that organizations should consider while embracing XLAs:

• Move from quantity to quality: Companies need to focus more on the quality of employee experience. Digital Employee Experience (DEX) management can be the right strategy. Here, XLAs can help organizations ensure that their managed IT services focus on outcome indices and provide a clearer view of individual needs and performances. Such agreements can be used in monitoring the health and performance of resources, hunting and diagnosing issues at the get-go, and finally, taking actions from anecdotal evidence to elevate the employee experience with changes like factored automation.

• Move with clear insights: Methods like CSAT and NPS related to computation fall short if they do not follow the proper context. Companies need to allow employees to provide real-time feedback with context depending on the priority of processes. This will help determine where, why, and for which services there is a better or poor employee experience. These insights will help prioritize action items, highlight gaps in delivery, and answer questions like: is the service reliable, is it meeting expectations, what processes can be automated, and how does its overall experience impact performance?

• Move beyond machine metrics: Every organization must look at an employee's complete well-being (applying simple principles of Herzberg’s two-factor theory) when thinking about XLA-driven digital workplaces. This opens avenues to define metrics that ensure employee hygiene and motivation. For example, lesser downtime to applications and improved network performance can ensure better working conditions and lead to a better employee experience. Similarly, auto-remediation of issues or helping employees by suggesting the subsequent best actions can lead to higher employee motivation and satisfaction.

• Move with baby steps: While the prospect of continuously improving experiences by unlocking opportunities sounds impressive, it is not advisable to take a headfirst plunge into XLAs. To get more people on board with this idea of signing these new kinds of agreements, one should begin with a mix of SLA and XLA. There may always be a place for SLAs, but we must take partners and clients on an XLA maturity journey. Organizations should consider starting with outsourced services, as internal processes rarely have SLAs, to begin with. XLAs must be tailored to specific business and IT components and point towards client-determined outcomes that are agreed to with the service provider. The measurements and targets can be modified continuously.

Predictions say that early-bird adopters of XLA will truly master aligning business outcomes with the essential service capabilities of the modern workplace in the near future. When crafted with care, XLAs can offer next-level insights on granular employee experiences across the organization. With new realities of business emerging one after the other in the next normal, it is best to prepare for business resiliency, agility, and future-proofed efficiency with a holistic XLA integration. Companies of different sizes, geographic presence, industrial trades, or operating models need to prepare for market uncertainties at the intersection of people, processes, and technology. XLAs can completely modernize contract governance vehicles and check all the boxes of tomorrow’s workplace to do the same.

Click here to learn more about the potential of XLAs to increase the focus on employee experience.