Layer 7: Evals and Observability
Beginner explanation
If you cannot measure quality, you cannot ship with confidence. Evals tell you whether the system behaves correctly. Observability tells you what happened when it did not.
Production explanation
Agentic systems need both offline and online measurement: retrieval quality, schema adherence, tool success rate, latency, cost, approval frequency, and user override rate. Teams that skip this end up debugging anecdotes.
Enterprise example
A legal document assistant is evaluated on citation accuracy, refusal correctness, latency, and cost per task before it is allowed into a broader pilot.
Architecture diagram
TypeScript example
type TraceRecord = {
runId: string;
latencyMs: number;
costUsd: number;
toolErrors: number;
};
export function shouldAlert(trace: TraceRecord) {
return trace.latencyMs > 8000 || trace.costUsd > 0.2 || trace.toolErrors > 0;
}
Python example
def score_grounding(answer: str, citations: list[str]) -> float:
return 1.0 if answer and citations else 0.0
Common mistakes
- measuring only thumbs-up and thumbs-down
- shipping retrieval without retrieval evals
- not storing enough trace context to reproduce failure
- watching average latency instead of percentile latency
Mini exercise
Define five metrics for one of your projects: one quality metric, one reliability metric, one cost metric, one speed metric, and one safety metric.
Project assignment
Create a trace schema and a lightweight offline eval dataset for your RAG or orchestration project.
Interview questions
- What is the difference between an eval and an application metric?
- Which metrics matter most for a tool-using agent?
- How would you gate a release using eval results?
Monetization angle
Organizations quickly realize that AI reliability is an ongoing operations problem. Evals and observability can become a premium implementation layer or recurring service.