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Mar 27, 2018 | IN Service Level Agreements | BY Reza Koranki
Is Your SLA Support Outsourced? The Answer May Surprise You

Companies often elect to go with OEM delivered service level agreements because there is a level of comfort associated with the brand.

If you think about it, we all do this.

There is a feeling of confidence in knowing that when your router switch presents an issue, you can call the manufacturer for support. It is the same reason that we buy any other name-brand merchandise because we trust the brand to deliver a certain level of quality.

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The Truth About OEM Support

Companies know that we are willing to pay a premium for this comfort, which is why they spend millions of dollars a year on marketing; ensuring that we recognize their brand name and come to trust it as a high-quality provider. But how do you know if you are getting “premium” service for that “premium” price?

The truth is that OEM’s outsource much of their SLA support, including logistics, portals, and technical support. However, the real detriment is in how this outsourcing is managed. Instead of incentivizing their support providers to find resolution and restore service for their customers, OEMs incentivize support providers to avoid interaction with OEM staff.

Quality is not an act. It is a habit. – (Click to Tweet)

For example, if you call a typical name brand OEM support because you suspect an issue with a LAN switch, your first interaction will likely be with a non-OEM employee. Support begins with an outsourced technical support team. This team’s goal is to prevent you from interacting with the OEM team, i.e., higher levels of support.

Why? Because the OEM’s own engineers cost more than the outsource team; an hour on the phone with a OEM engineer costs the OEM much more than it does for you to spend two hours on the phone with their outsource team.

To prevent you from accessing higher levels of support, the outsource team will try every possible solution at their disposal before escalating your case; even those that you both know will not solve the problem. After trudging through Tier 1 and Tier 2 support, the outsource team will issue a hardware replacement. If that does not solve the problem, you will likely be sent back through Tier 1 and Tier 2 before finally gaining access to an OEM engineer in Tier 3. All the while, your function is decreased, and downtime costs are mounting

Quality means doing it right when no one is looking. – (Click to Tweet)

What Happened to True OEM-Provided Support?

OEM outsourcing began with replacement and repair vendors. Authorized dealers would issue replacement parts and perform repairs on returned equipment. Over the years, logistics facilities began to offer repair and replacement services to OEMs at a much lower cost. 

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Now, companies like the United Parcel Service (UPS) and FedEx perform basic repairs before delivering hardware to OEM SLA clients. Today, OEM hardware replacement equipment has dead-on-arrival rates that are much higher than those of high-quality independent Service Level Agreement firms.

However, this model does save OEMs a considerable amount of money and creates an SLA revenue stream that supports many other aspects of the business. OEMs commonly outsource field engineering, hardware replacement, hardware repair, and technical assistance center (TAC) support to the lowest bid without regard for the quality of service. To keep costs low, Tier 1 support is provided by non-certified technicians who only offer basic triage support. Their function is to answer three questions:

1) Are you entitled to support?

2) Is the equipment broken?

3) Has it been rebooted?

Without verifiable proof of the answers to these questions, a client will spend an inordinate amount of time in a support tier that does not have any restoration or resolution capability.

Finally, this model of service supports and even fosters segmented information and overcharging. With every aspect of support handled by a separate, outsourced firm, clients must continually re-explain issues. Notes are not transferred effectively between tiers of support, if at all, and there is an abundance of inefficiency.

Additionally, each firm that passes the case on to another provider is adding a profit margin. As a result, the client is paying for the profit margins of several support firms in addition to the “OEM-premium.”

Cost is more important than quality but quality is the best way to reduce cost. – (Click to Tweet)

Is There A Reliable Alternative to OEM Support?

High-quality independent SLA providers are not incentivized to replace your equipment – they are incentivized to restore service and resolve issues and to do it as quickly and efficiently as possible. Since these firms do not manufacture or sell equipment, their inventory is purchased strictly for contract support and not as a means of supporting other areas of the business.

Consider this, automobile repairs at a dealership are always more expensive than repairs performed by a high quality independent service station. Why? Because the dealership must pay for the entire sales inventory, the staff, and the real estate in addition to the garage, these costs are reflected in the price of repairs performed at the facility.

High-quality independent SLA firms only utilize outsourcing for non-expert services, such as shipping and stocking, not for repairs or TAC. Since most of the support is provided by in-house engineers, high-quality independent SLA firms provide access to expertly trained and certified support from Tier 1 through Tier 3.

In fact, the type of certifications and years of experience provided in Tier 1 support from an independent provider are significantly higher than those in Tier 1 of OEM support.

Since these firms perform support using in-house talent, there is no margin stacking and no delays or barriers to accessing the highest levels of support. Both the clients and the support engineers spend less time on the phone because issues are resolved sooner when there are highly trained, certified, and experienced experts diagnosing issues and answering questions. There is also no incentive to encourage you to replace equipment with the newest model when there is a possibility of continued use and repair.

The low-quality support provided via many OEM SLAs favors a quantity over quality model. The goal of the OEM is to sell as many SLA contracts as possible and to bring in as many, low-cost, support teams as needed to service those agreements. The OEM is taking advantage of the power of their name recognition to solicit trust from SLA clients, even when it is not warranted. Partnering with an independent provider that utilizes in-house talent to support your network equipment decreases downtime and eliminates barriers to technical support access. It also ensures that you have reliable access to the highest levels of support when you need it.

billion-dollar-it-maintenance-headache 

 

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