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Difference between Key Performance Indicator KPI and Service Level Agreement SLA

Difference between Key Performance Indicator KPI and Service Level Agreement SLA

There is often confusion between the terms ‘KPI’ and ‘SLA’. In this article, we will look at the key differences between these two important business metrics. We will also explore how they can be used to improve your business performance.

What is Key Performance Indicator KPI?

  • A Key Performance Indicator (KPI) is a quantitative measurement used to evaluate progress toward organizational goals. KPIs can be used at all levels of an organization, from individual departments to overall company performance.
  • While there is no one-size-fits-all approach to developing KPIs, there are certain best practices that should be followed in order to ensure that they are effective. First, KPIs should be aligned with the strategic goals of the organization.
  • Second, they should be quantifiable and relevant to the specific department or function being evaluated. Third, KPIs should be actionable, meaning that they should provide insight into how to improve performance.
  • Finally, KPIs should be regularly monitored and reviewed in order to ensure that they remain effective. By following these best practices, organizations can develop KPIs that effectively measure and improve performance.

What is Service Level Agreement SLA?

  • Service Level Agreement (SLA) is an important part of every business contract between a service provider and a customer. It spells out the minimum expectations that each party has of the other in terms of the quality and quantity of service to be delivered.
  • Service Level Agreement can help to ensure that both parties are clear about their obligations, and can help to prevent misunderstandings or disputes that may arise over the course of the contract.
  • In addition, Service Level Agreement can help to hold both parties accountable for meeting their commitments and can provide a mechanism for resolving any issues that may arise. For these reasons, Service Level Agreement is an essential part of any business relationship.

Difference between Key Performance Indicator KPI and Service Level Agreement SLA

  • Key Performance Indicators (KPIs) and Service Level Agreements (SLAs) are two important tools that can be used to measure and improve the performance of a business.
  • Both KPIs and SLAs involve setting specific targets and then tracking progress over time. However, there are some key differences between the two. KPIs are typically used to measure the performance of individuals or departments, whereas SLAs tend to be used to measure the performance of an organization as a whole.
  • In addition, KPIs tend to be more numerically focused, while SLAs often include Qualitative targets. As a result, both KPIs and SLAs can be useful tools for measuring and improving performance, but it is important to choose the right tool for the job at hand.


The main difference between a KPI and SLA is that KPIs are measurable, while SLAs are not. Measuring the success or failure of your business against specific KPIs will help you to identify areas where you need to make changes in order to improve performance. However, since an SLA cannot be measured in the same way as a KPI, it is important to have a clear understanding of what your organization’s goals and objectives are before setting either type of goal.

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