We are going great guns on our IFRS Blog. This is yesterday’s post: http://faoblog.com/ifrs/intro04/

Once you request your client to share the current service level definitions, you will quite often be surprised that there are either almost no or very minimal definitions existing. You will also wonder at the type of definitions in place. Most of these will be business metrics,  like release of payments should happen by a certain date, or if the customer payments came in time, if any penalty is to be levied for late payments and its impact on financials. Rarely we shall see the standard measurements that we know of. Why? Primarily because your client never operated in a shared mode, and even if they did, it was a part of their organization itself. So the focus was to ensure that things get done when needed.

A short note on service level definitions.

What really are service level definitions?  We in the off-shoring world are very strongly focused on only a few things, turnaround time, accuracy and time per transaction. But is this what the client really wants? The client initially is not too worried about these. He / she knows that in the initial stages the gain will probably come from the labor arbitrage or may be through standardization. The first focus is to stabilize the change and you are the agent of that change. This does not discount the need to define service level definitions. So the onus is on you to create a definition for service levels, which is a mix of “operational” and “business” metrics. You will need to demonstrate why do you need such metrics and how will it benefit your client.