On the hunt for a trusted telco provider? Rule number one: read the SLAs.
Standard in the telecommunications industry, service-level agreements (SLAs) provide resellers and customers with a guarantee that specific standards are upheld. From customer support response time and service uptime to the speed of equipment replacement, SLAs keep measurable benchmarks in place — and the supplier of those services agrees to maintain them.
If you’re a telco reseller, you’re probably already familiar with service-level agreements — but do you know why paying such close attention to them is important?
What’s the deal with SLAs?
Packaged neatly in a single document, SLAs disclose information on a vendor’s services and expectations, so if there are issues with service delivery, neither party can plead ignorance.
It might sound a little doom and gloom, but SLAs, when done correctly, benefit both the provider and its customers.
How?
- Setting clear expectations
Some may say SLAs are most valuable to telco providers because they allow them to define and monitor their services, but they’re also handy for customers. With an SLA in place, all parties know the expected service quality and the timeframe within which it’ll be delivered.
For example, a telco provider’s SLA may promise network availability of 99.999% and allow the customer to reduce their payment by a given percentage if that’s not achieved — usually on a sliding scale based on the magnitude of the contract breach.
With this in place, telco providers understand the level of service they should provide, and resellers can weigh the benefits of the service and compare it to other providers for the best deal.
- Boosting customer satisfaction
Every customer wants to ensure they’re receiving the quality of service they’re paying for.
When negotiating an SLA with telco providers, resellers should prioritise the requirements of their customers. Rather than building SLAs around existing templates or what others in the telco industry are doing, telcos should develop SLAs based on the target market’s needs.
Plus, by providing precise and measurable goals, SLAs allow resellers to track the provider’s performance, ensuring a solid level of service is maintained. This is where metrics come in handy.
- Ensuring accountability
Usually, SLAs include agreed-upon penalties called service credits enforced when providers fail to meet set standards.
Telco providers may negotiate for the right to ‘earn back’ any paid service credits after the breach of an SLA by performing at or above the SLA standards for a period. Whilst this is an option for customers to consider, it’s usually worth stipulating a combination of penalties (as well as an incentive for providers, such as a monetary bonus for above-satisfactory work) for the most security.
Though the penalty of service credits is intended to incentivise provider performance, some organisations prefer to use SLAs to encourage productive conversations around performance, priorities and the future of their partnership.
After all, telco services can vary in nature. For example, the technical complexity of calls handled by one provider may mean the average call time is higher than typical call-handling services, which shouldn’t be penalised.
- Mitigating risk
When in SLA negotiations, it’s essential to include risk mitigation clauses.
Most businesses rely on telecommunications to deliver services and communicate with customers, meaning downtime can be costly. So, if a telco provider breaches its SLA, customers will want to ensure there’s less risk of financial loss — which is where the service credits come into play.
The SLA will also include a section listing exclusions, meaning penalties for failing to meet set standards don’t apply in certain situations. Usually, this aims to excuse the service provider from events beyond its reasonable control, such as earthquakes and other natural disasters that cause temporary downtime.
- Continuous improvement
As SLAs ensure consistent and predictable service delivery, telco providers need the data to back up their claims and identify where service improvements can be made.
So, the SLA should outline metrics that help manage expectations regarding the provider’s performance, including availability and uptime percentage, specific performance benchmarks, service provider response time, resolution time, mean time to recovery, security and much more.
Once established, customers can use the metrics as a baseline for their service requirements and the level of service they expect — though this will likely need to be revisited from time to time.
How often should an SLA be revised?
As businesses change, so do their telco service requirements. So, it only makes sense to regularly scale, update and review the SLA for all parties.
Typically, this would be annually or bi-annually, but growing companies will need their SLAs checked more frequently.
Not sure if your SLA needs another glance over? Ask yourself:
- Have your customer’s business requirements changed?
- Has there been a change in the workload?
- Have the SLA’s measurement tools, processes and metrics recently been altered or improved?
- Has the telco provider added a new service into the mix — or shut down its services?
Often, SLAs just need updating. But if new conditions no longer satisfy customer requirements, they may be forced to terminate the contract.
It’s also important to remember that if the SLA is out of date, resellers and their customers are no longer contractually supported by the telco provider, which can lead to issues down the line.
Details like this can go unmissed if the SLA isn’t regularly revised — or if the proper stipulations aren’t negotiated in the first place.
Accurate, high-quality SLAs are critical within the telecommunications industry. So, if you want your telco provider to take every measure to provide the best quality service possible for your teams and customers, it might be time to take another look at those contracts.
By Luke Stoodley, the product manager at telco provider Invosys, discusses how telco resellers and their customers can benefit from strategic service-level agreements when negotiating with a new provider.
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