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CSPs Struggle to Live Up to SLA Expectations

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Rob SmithBy Rob Smith

At a time of transition in the telecoms landscape, as cloud and 4G services come to the fore, communications service providers (CSPs) are still struggling to deliver on pre-defined service-level agreements (SLAs), according to MDS’ Connecting with Business Customers 2012 research.

The survey, conducted among 205 IT and telecoms decision-makers, found that 93 percent of respondents continue to experience problems with the SLAs they hold with CSPs. While SLAs remain crucial in enabling businesses to monitor the value they receive, CSPs must clearly do more to build confidence and reduce concern among their customers. Critically, for CSPs, improvements to the deliverance and accountability of SLAs can prove to be a major proof point in establishing customer loyalty — 76 percent of decision-makers said they would choose one service provider over another if a transparent and scalable SLA were available.

This demonstrates a massive opportunity for CSPs, who must begin to prioritize the development of their SLAs higher up the value chain. With the rapid adoption of cloud-based technologies and the growth of outsourced and managed business models, the need to effectively measure the mutually agreed SLA is increasingly vital. Additionally, as CSPs look to convince businesses of the value of these additional services, SLAs provide clear and actionable commitment from the operator on the service level promised.

Fifty-nine percent of respondents in the research also noted that SLAs had even greater importance in a time of financial scrutiny and when services come under the microscope for analysis in the modern business environment. SLAs give the customer peace of mind that they have an agreement in place to provide certain services at pre-agreed levels, and the ability to call the operator to account should service fall below these criteria.

A significant finding that needs addressing relates to the balance and development of SLAs. Sixty percent of contracts had been developed by the CSP as opposed to the customer requesting a bespoke service that best met company needs. It is vital that CSPs work with customers when establishing service levels. Long-term strategic partnerships are built upon trust, and this can be reinforced through robust, mutually protective SLAs.

While the emergence of new services has added to the scrutiny of individual SLAs, CSPs need to view new technologies as a chance to improve retention through value-added offerings.

Billing plays a key component in SLAs, and is the best way for customers to quantify what has been charged against quality of service. Enterprise managers in businesses will be reluctant to fully allow BYOD within their business if it means that a lot of time and effort is needed on their part to navigate bills and decipher where there may be errors in charging, especially if policies are updated on a regular basis. This is where CSPs can add significant value to businesses and, in turn, employees themselves. By providing easy-to-navigate bills, businesses can easily see how their charges break down, what is costing the most, and how the CSP is performing against the agreed SLAs. Businesses will be able to effectively monitor the value they’re getting from their communications provider, and use it to make a business case for further investment in that provider, or to potentially move their business elsewhere if the quality of service is not as expected.

The challenge, then, is not only to ensure that all elements of the service are robust enough to deliver against heightened customer expectations but also to ensure measurability. To that end, SLAs with all contract partners must be monitored and held accountable for quality delivery of the elements for which they are responsible.

Across the service-delivery enablement chain, the integration of analytics and network monitoring tools can provide dynamic service assurance controls that ensure SLAs can be proactively managed to meet or even exceed customer expectation.

The somewhat ad hoc and manual customer management of the past now needs to be a primary focus if service providers are to cash in on the new IT/telecoms landscape. The SLA is, in essence, the "killer app" that all customers need and all communications service providers can offer.

Rob Smith is director, marketing development, MDS. Smith has 10 years of experience in the telecoms industry, with a sustained track-record of delivery and creating growth.

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