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Does Your SLA Support Your Global Enterprise?

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Does Your SLA Support Your Global Enterprise?

Posted by Reza Koranki on May 21, 2019 12:16:22 AM
Reza Koranki
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Seventy-four percent of surveyed executives agree that maintaining control of international business activities is difficult. In addition to diverse marketing environments, human resources challenges, and both political and logistical oversight demands, maintaining a reliable network of technology assets requires careful forethought and consideration. Businesses that operate across international borders rely heavily on network systems to facilitate business transactions and ensure service, support, management and sales throughout the world.

Forty-four percent of network professionals at midsize and large enterprises report that network changes lead to outage or performance issues several times a year. - (Click to Tweet)

Service level agreements (SLAs) are complex. When applied internationally, many service providers opt to increase prices while decreasing coverage and pass along many of their business costs to the client. Service support provided by original equipment manufacturers (OEM) is extremely siloed.

This segmentation prevents these large organizations from leveraging their assets to provide the highest levels of support at the most cost-effective price. When multiplied by a number of geographic locations or spread over several countries, the impact on service is compounded.

The problems often encountered during intake, escalation, depoting, and case hand-off are magnified when experienced on a global scale. In addition, pricing, partnerships, and fine print may lead to SLA support that is significantly over-priced for the level of support received and contributes to increased downtime.

Communication is key to any global business. – (Click to Tweet)

Warning Signs of International SLA Challenges

Inexplicable Price Increases

Often, service and support pricing for equipment outside the United States is double or even triple the cost of supporting equipment housed within the United States. To balance this pricing disparity, OEM providers offer substantial discounts on international support agreements for equipment outside the United States.

However, even after the discount is applied, the cost of the agreement often far exceeds support costs in the United States.

In most cases, these price increases are unwarranted. In Asia, Europe, and many other parts of the world, providing support is no more costly than it is in the United States. In fact, well-positioned depots can even take advantage of closer proximity to the manufacturing location to decrease shipping costs and time associated with replacement hardware inventory management.

Precarious Partnerships

When an indirect channel partner provides the means to purchase support, clients risk sudden provider changes. The OEM grants and revokes channel partners’ ability to sell their services internationally, at will. These regional agreements limit competitiveness in the area and ensure that the OEM maintains control of the flow of services to the region.

With as little as 30 days notice, an OEM can revoke a channel partner agreement, forcing each of the partner’s customers to scramble to find new providers or sign with the OEM. Often, the client is forced to pay more or go without coverage while new terms and conditions and pricing are negotiated.

The OEM, for any reason and without notice, may also modify channel partner agreements leading to increased pricing and decreased support for the end-client as these changes are filtered down through contract negotiations.

Regional agreements and siloed OEM support make it difficult or even impossible to provide streamlined, consistent support of equipment located in different countries yet utilized by one organization. In many cases, devices that interface with one other, regardless of location, will experience similar support needs.


However, OEM and channel partners do not have the infrastructure and operating procedures necessary to provide streamlined, consistent support. Instead, multiple teams work on each device individually, contributing to increased downtime and inefficient use of resources.  

Support teams are not co-located further contributing to a lack of collaboration. Harvard Business Review notes, “When team members come from different countries and functional backgrounds and are working in different locations, communication can rapidly deteriorate, misunderstanding can ensue, and cooperation can degenerate into distrust.” In short, the team dynamics of the support provider do not encourage the best possible support for the client.

Facing the Fine Print

With the increased costs associated with international support agreements, many clients expect that the support provider will assume duties, tariffs, taxes, and fees related to importing replacement parts. However, this is not true. Instead, these costs are often passed on to the client.

The cost of imported replacement equipment may be twice as much or more since the equipment is taxed at retail (not wholesale) rates. In addition, delays passing through customs contribute to increased downtime that is not compensated for by replacement equipment shipping guarantees.

It is also common for support agreements to mandate that all technical support will be provided in English. In some cases, intake (Tier 1) support may be provided in the local language. However, expert levels (Tier 2 and Tier 3) are only offered in English.

This stipulation can slow case resolution and make it more difficult for the client’s teams to interface with the support provider efficiently.

Finally, contract negotiations are complicated by the need for support in several locations. OEM and channel partners do not have the infrastructure needed to offer service level agreements that provide equipment coverage in multiple countries.

As a result, each country requires a separate contract with uniquely negotiated support levels, terms and conditions, and pricing.

Service Providers that Support Your International Needs

Common Sense Pricing

Regional pricing makes it easy to compare independent provider support costs with the cost of support provided by an OEM. Pricing should be consistent across multiple regions and should not include unnecessary premiums for supporting equipment located outside the United States.

In some cases, pricing premiums are warranted when hardware is located in a region that is difficult to support because of the infrastructure of the country or international relations.

However, support providers that utilize U.S.-based pricing offer service agreements at a cost that is 50% less than OEM support agreements and allow for multiple support locations to be included in the same contract.

This forces down the price of support through the economies of scale while ensuring consistent service for all equipment.

Making money is art and working is art and good business is the best art. – (Click to Tweet)

Consistent Support Teams

High caliber independent support providers are not beholden to OEM restrictions. Instead, these service providers deliver consistent, reliable support across all client locations. Independent support providers with in-house engineering teams allow clients to utilize the same support resources regardless of equipment location.

Notes are easily transferred from one technician to the next, and all engineers involved in the case have the opportunity to collaborate to provide support to all impacted devices, regardless of location. According to Keeley Wilson and Yves Doz, “When a project is split over time zones, cultures, and languages, there is very little latitude for iterative learning.”

In the environment of diagnosing and resolving complex network performance issues, each case provides an opportunity for the engineering team to work together to uncover the best resolution for the client’s entire, global, presence.

Independent support firms can continue to service equipment that may be aging out of OEM agreements. In many countries, older devices are utilized in greater scale, and diminishing OEM support leaves clients with few support options as both OEM and channel partners restrict or discontinue support.

Independent providers can continue to offer legacy support even after the OEM’s Last-Date-of-Support passes ensuring maximum utilization of existing equipment.

Great things in business are never done by one person. They’re done by a team of people. – (Click to Tweet)

Support that Does Not Stop at Equipment

True partnerships support all aspects of your business, from contract negotiation through support utilization. Independent support providers that operate as partners in your organization ensure that contracts are structured in the way that best supports your business needs.

This may mean that all equipment support locations are included in a single contract or that support is divided into multiple contracts to support independent billing codes at the client's request. Contract customizations ensure that the needs of the client, and not the standard operating procedures of the provider, are at the forefront.

Support providers that pass along duties, tariffs, taxes, and fees to the client are not only increasing the cost of support; they are revealing a hidden truth – non-local depot facilities. Support providers with in-country depots have already absorbed the costs and the delays associated with importing replacement hardware.

Sparing in the local economic theater ensures fulfillment of next-business-day hardware replacement and allows for inventory to be supplied from within the country to decrease sparing costs.

There is no such thing as “business” ethics. There is only one rule – you adhere to the highest standards. – (Click to Tweet)

Support partners ensure that all exceptions, including increased sparing costs or time, are discussed upfront, and that appropriate processes are in place to streamline hardware delivery while meeting the budgetary needs of the client.

Finally, high-quality service providers offer multiple levels of support in a variety of languages. Access to Tier 3 engineers fluent in the language of your resources significantly decreases downtime and increases the efficiency of your teams.

Operating in the global arena is common-place for many enterprises. However, most support providers, including OEMs, do not offer service level agreements that recognize and facilitate increased global business efficiency.

When applied on an international scale, flimsy service level agreements that fail to acknowledge the unique needs of the organization become even worse for the health of the business. However, well-structured, well-supported, customized support partnerships thrive when applied to global support needs.

How we saved the world's third-largest pharmaceutical company millions

Topics: Service Level Agreements


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