Latency is all about packets. Data packets, that is.
Data is shared between networks in a series of packets. Even something as simple as an email message is deconstructed and transmitted in smaller fragments of data (a typical packet contains 1000-1500 bytes) and then reassembled once it reaches its destination.
Latency is the the amount of time it takes for a set of packets to reach a selected destination and send confirmation of their arrival back to their transmission source. You can think of latency like an MPH measurement of your network.
High latency means slow speeds, and can introduce issues such as choppy streaming, poor audio on VoIP calls or general delay throughout the user experience. It's definitely something that you want to isolate and correct if possible. But how do you find out when high latency is impacting your entire network?
Similar to identifying packet loss, you can also use the ping + trace route command to determine latency. Latency is measured in milliseconds (ms) and your service provider will generally have an SLA that outlines what they consider "heightened latency."
Best-effort providers will typically say anything under 15ms is considered normal, whereas services backed by an SLA will usually have a reported latency under 5ms.
Figuring out the cause of latency is much trickier. There are a number of issues that can contribute to higher latency - problems with the physical line (fiber or copper), issues with the networking gear, congestion along the route or even heavy internal traffic.