Consumer advocacy: Bulked-up end users flex their muscles with SLAs

Telecommunications is a vital tool for modern businesses, which demand a high level of fidelity in the service they acquire. In competitive markets, where most service providers derive about 80% of their revenue from high-volume business customers, meeting such demands is no longer enough-today's promises must be specific.

Service providers know they must keep important customers happy with fast, quality service and performance. This has precipitated aggressive price cutting and accelerated the innovation cycle as service providers race to expand theAreach and functionality of high-capacity enterprise solutions such as frame relay and asynchronous transfer mode.

With prices and innovation under pressure, the competitive battleground has shifted to include network integrity. It's no longer enough to promise a high standard of performance. With so much at stake in the telecom network's quality and reliability, customers are demanding that service providers share the risk in an outage, disruption or installation delay. They are insisting on service level agreements (SLAs) backed by money-back guarantees. And the cost of these guarantees is escalating.

SLAs as strategic competitive tools The agreements-formal written contracts between a service provider and a customer-set the level and parameters of service that the provider will guarantee. SLAs are emerging as strategic tools that can help service providers differentiate their offerings.

Service providers are discovering that flexible, well-crafted SLAs that provide guarantees for installation, fault correction, availability and service classes can be the key to closing a sale.

However, the agreements aren't new. Service providers have worked under contracts that set performance objectives for many years, but the earlier ones were generic and relatively useless.

Today's agreements are explicit and demanding. Service providers that invest in important business accounts through strategically deployed SLAs have huge competitive advantages.

"When clearly defined and understood, SLAs are powerful instruments for both carriers and their customers," says Brad Cleveland, president of the Incoming Calls Management Institute in Annapolis, Md. "More than just a guarantee, they encourage communication on issues such as cost, resource allocation and business priorities, and they necessitate a healthy dose of on-going planning and collaboration."

Another factor underscoring the importance of the agreements is the emergence of outsourcing in managing complex sophisticated networks such as ATM and frame relay.

As telecom solutions become more dynamic and complicated, businesses from manufacturing to merchandising are more reluctant to divert human resources from the core business into managing elaborate telecom infrastructures. Instead, they turn over management to someone else, set rigid and enforceable specifications, and get iron-clad service guarantees.

But outsourcing doesn't mean customers are prepared to wash their hands of their telecom operations. With so much riding on the network, such an action would be foolhardy.

Instead, customers are demanding not only that the terms of their agreements be met, but also that they are seen to be met. They are demanding tools for network visibility and near real-time assurance of quality performance.

What customers want A competitive marketplace produces savvy and demanding customers. Encouraged by consultants and journalists who urge them to drive hard bargains, these customers are just beginning to flex their buying muscle.

Many customers are so anxious to obtain meaningful quality-of-service (QOS) reports that they are rejecting off-the-shelf reports in favor of customized solutions. This suggests a clear opportunity for service providers prepared to go the distance to deliver flexible, tailored and integrated reporting solutions.

Customers still committed to outsourced network management solutions demand the big picture of their network's performance. This demand suggests the need to look at other mechanisms to present a clearer view of performance level quality.

Above all, they want to feel more in control of their network performance information and be better able to monitor and enforce the terms and conditions of the SLAs. However, as one customer put it, "[The service providers] control the data, they control the information, they control the presentation."

With customers demanding greater visibility, the onus is on the service providers to add value to their SLAs and network management reporting functions by giving customers the tools they need to keep their service providers honest.

Tools of the trade Threshold reporting. The need for automated and integrated reporting systems has prompted many service providers to re-examine their QOS reporting tool-kit. Many reporting systems today are manually driven, requiring the QOS report generator to compare huge volumes of data from a broad array of parameters and search for SLA violations. The process is tedious, unreliable and time-consuming. Because it is also designed to report only on violations, it tends to obscure otherwise useful information (Figure 1).

Threshold reporting, for example, is a potentially powerful capability for the service provider and customer. Advance warning of service deterioration-even within the threshold of the SLA-positions the service provider to take remedial action to prevent an imminent violation. Giving customers access to this data indicates a conscientious resolve to correct deficiencies before they become problematic and helps build a stronger business relationship.

Cross-platform functionality. Few sophisticated telecom systems today are homogeneous. For example, a large enterprise network may contain ATM switches from Vendor A, combined with equipment from Vendor B and Vendor C. These networks also may comprise managed LAN service components or WAN managed services. Each vendor may offer its own service management solution, but a kaleidoscope of reports causes confusion and incompatible information (Figure 2).

Service providers cultivating long-term relationships with their important business customers must plan to migrate to complex solutions. A QOS reporting tool that can expand to embrace LAN services, frame relay and ATM may be a valuable asset when negotiating SLAs for a client's expanding needs.

Scalability. Network performance monitoring tools not only must be flexible enough to accommodate an evolving enterprise network, they must also anticipate growth. Service providers need to select tools that build upon up-to-date data collection, data warehousing and data mining methods that deliver maximum scalability. Requests to measure more than 1 million components are not uncommon.

It's a logical step to proceed from threshold reporting in near real time to delivering alarm systems to signal imminent deterioration as soon as it is discernible. This capability would serve as the ultimate security blanket for customers whose entire enterprise rests on the integrity of their telecommunications.

Logically, QOS solutions focused on frame relay and ATM may also evolve to embrace Internet protocol and other business-critical networks.

Extendibility. Network performance is only one aspect of customer satisfaction. Speedy provisioning, accurate accounting and guarantee fulfillment are critical.

Customers expect the interval between ordering a service and turning it up to be short. Carriers also must be able to capture and report accounting data. If a rebate must be paid, the customer and the service provider need to know that it is paid on time and in accordance with the terms of the SLA.

To ensure and demonstrate full delivery on their promises, service providers need to extend their oversight of network service parameters to embrace other customer service departments.

With the increasing importance placed on international telecommunications, service providers also should seek solutions that embrace their SLAs with other telecommunications jurisdictions (Figure 3).

Each foreign location linked to a customer's network introduces a new suite of service providers and vendors whose performance must be mapped against the client's SLA. Solutions that will reduce the complexity of this task will deliver another important strategic advantage.