The Importance of Experience-Level Agreements (XLAs) in IT Outsourcing
In today’s tech-savvy world, digitization and customer-centricity have become driving forces behind every successful business. However, the correlation between these two trends has become alarming. The more people rely on technology, the greater the impact of a poor customer experience. As a result, IT outsourcing firms are being pushed to pivot from service-level agreements (SLAs) to experience-level agreements (XLAs).
In this blog, we will discuss the differences between SLAs and XLAs and reflect on the possibility of XLAs replacing SLAs. We will also delve into the challenges associated with XLAs and the need for a healthy mix of SLAs and XLAs to ensure optimal IT service success.
XLAs: A Beginner’s Guide
XLAs are contracts established between IT service providers and customers. These agreements outline the quality of service for users in clear terms. XLAs aim to provide better IT experiences and are primarily focused on end-users. They use both hard and soft data for measuring user satisfaction through functional and emotional interactions with the technology. By leveraging customer satisfaction KPIs, IT service providers can constantly improve their technology and optimize the user experience.
SLAs vs XLAs: A Comprehensive Look
While SLAs have been designed to mitigate IT outsourcing risks, they define the service level the customer expects from an IT outsourcing partner. Metrics such as service availability, capacity, and security determine the success of the agreement. However, SLAs focus solely on technical specifications and do not guarantee that end-users will have a positive experience while using the product.
As a result, there has been a growing demand to change SLAs to factor in the user experience and measure business outcomes from both a business and user perspective. On the other hand, XLAs measure an intangible concept- user experience. In turn, IT service providers use a combination of hard and soft data to quantify user experience and service outcomes.
Quantifying XLAs
SLA metrics are quantifiable and easy to evaluate. However, XLAs measure something intangible- user experience. Therefore, companies must measure the following:
Hard data- IT performance analytics, the product’s impact on user productivity, and user interactions with various components.
Soft data- user sentiment analysis, issue statuses rated by users, and user feedback. In interpreting user evaluations, it’s essential to define common parameters of problems clearly.
Each experience category accumulates a score that determines service outcomes and user experience. This enables the search for components causing poor experiences or slow adoption and evaluates the overall experience. Additionally, XLAs drive a shift from penalties to continuous improvement using closed-loop feedback cycles. All of these have a significant impact on boosting customer satisfaction levels throughout the project.
Challenges with XLAs
XLAs focus on measuring the user experience, leaving service providers to deal with biased and subjective evaluations. Such unfavorable circumstances may project a negative image of the project even when the majority of users are satisfied. On the other hand, users may be reluctant to provide consistent feedback when they are satisfied with the service, resulting in lower scores.
To mitigate these challenges, service vendors must propose XLAs to customers who have established a feedback routine with their users. Users should be encouraged to provide their feedback regularly across different touchpoints. Furthermore, an XLA can promote feedback collection by making it a binding requirement.
In Search of a Healthy Mix of XLAs and SLAs
SLAs are essential for measuring the technical side of an IT outsourcing agreement. They ensure quick resolution of technical issues and maintain the minimal service level. However, they are not proactive or geared towards optimization to prevent recurring issues in the future.
Compared to SLAs, XLAs have a stronger focus on optimizing the user experience, measuring customer satisfaction, driving feedback collection through closed-loop feedback cycles, and enhancing the motivation behind quality service. Therefore, using a healthy mix of the two approaches can lead to optimal IT service success.
Conclusion
In the end, customer experience is critical in today’s business world. The use of XLAs to improve user experience and ensure optimal IT service success is essential. While SLAs have their place in defining the service levels customers expect, they must be modified to include user experience and measure business outcomes. A healthy mix of SLAs and XLAs can lead to continuous improvements in the services provided by IT outsourcing companies.
