Establish Customer-Based Service Level Targets
In many industries, service level agreements (SLA) are a common way for businesses and customers to understand the services being provided, the measures or key performance indicators (KPI) by which the service will be measured, and the level of performance that is expected for the price being paid. Homeowners may have SLAs for multiple services such as plumbing and heating, lawn care, or snow removal. In the public sector there is no formal SLA between the public agency that manages infrastructure and the individuals and groups who receive services from that infrastructure. However, many agencies find that establishing KPIs based on customer-needs and expectations is an effective way of informing budgetary, work planning, and capital programming processes to ensure that the agency’s investments adequately serve system users. This How-to provides an overview of a process agencies can follow to establish KPIs and related performance targets based on customer, or stakeholder, input.
The first step in establishing customer-based targets is to identify the customers. While customers are generally considered to be system users, there are many more individuals and groups concerned with transportation infrastructure than just those who use the transportation system. Figure 4.3 provides a list of typical stakeholders, but there are many more stakeholders than those listed.
Articulate what each stakeholder wants out of your transportation system
Each stakeholder has a unique set of wants with the transportation system. Most stakeholders have multiple requirements; however, the purpose of this step is not to assign all service requirements to the right stakeholder, it is only to be sure to capture all potentially relevant service requirements. This can be done through many different approaches such as: customer or industry surveys, direct meetings, or customer-feedback web or social media outreach. This effort should be as extensive as practical and updated frequently. While passive gathering of information is inexpensive, it may lead to over representation of some stakeholder groups and under representation of others. The agency’s environmental justice policy or procedures can serve as a resource for engaging with groups that may otherwise be underrepresented.
Determine how to measure or demonstrate that you are fulfilling the wants or desired services
Once the services desired by each stakeholder have been defined, the next step is to establish a means of measuring the delivery of those services. At times it may be possible to directly measure the service, but often that is not the case. Agencies sometimes use a standard to ensure a service requirement is met. Compliance with a standard becomes the performance measure. Other service attributes require measures that can be identified as a service target. These may change over time, given service level expectations and willingness to pay. Additional guidance on establishing performance measures can be found in NCHRP Report 551, Performance Measures and Targets for Transportation Asset Management and NCHRP Report 422, Maintenance Quality Assurance Field Implementation Manual.
Which of those potential measures are most important for investment decisions?
Determining which measures should be selected as KPIs is not a simple process and should be revisited regularly. It is best to focus on a few KPIs that are directly related to stakeholder needs or perception of performance than try to manage using a long list of measures. The more directly KPIs relate to the agency’s business decision and stakeholders’ understanding of performance, the better. For these reasons KPIs based on user experience such as congestion, safety, or freight movement can be advantageous. However, these may not relate directly to asset management metrics, which tend to be focussed on asset conditions.
There is also a need to choose KPIs which can be measured accurately and at the lowest expense. Using a prioritization matrix to rank potential KPIs based on their effectiveness in communicating stakeholder wants and ease or expense of reporting can be a good means of selecting the set of KPIs that will best serve the agency. Chapter 6 provides additional information on selecting performance measures and targets.
It is important to note that none of the criteria used to select are static. These criteria will change with time, so agencies should revisit their list of KPIs on a regular basis to make sure they are still the right measures, and there isn’t a more cost-effective means of collecting the needed information. The process of updating KPIs should be documented in an agency procedure or policy.
Establish service level statements and KPIs for reporting to stakeholders
Service level statements can be derived from the resulting KPIS to address specific stakeholder wants. Using the example materials shown in figure 4.3, a resulting agency service level agreement might be:
The agency will provide a transportation network that:
- Is in good condition: (How Good? See Condition Target)
- Has sufficient capacity (How sufficient? See Travel Time Targets on commuter corridors)
- That is available to users 24/7 (How available? See Lane Closures measures)
- Is managed through responsible investment (How responsible? See our AMP and BCRs for all investments); while leveraging cost-staring opportunities with our partner stakeholders (See Cost Sharing Targets)