Understanding SLA Fine Print
Fine print…limitation of liability.
These terms are often heard and used as businesses prepare to sign new service level agreements. But, what do they mean and is there any way to ensure that all of that fine print is not undermining the intent of your network support contract?
Companies partner with network service providers to ensure that their networks perform as needed. This means that when an outage hits, the service provider does everything possible to restore service as quickly. At least, that is what you hope.
However, the fine print in many SLA gives large loopholes through which some network support providers, including OEMs, can slip to avoid providing the highest levels of support.
So what should you be looking for?
“Not responsible for…”
Statements that begin with these words usually end with a list of items that are not supported by the SLA. In some cases, this type of clause is reasonable, in others, it most certainly is not.
Not responsible for the support of third-party component devices, including troubleshooting and replacement.
Not responsible for the support of covered equipment when the covered equipment is connected to or interacts with non-covered equipment.
Quality is not an act; it is a habit. - Aristotle (Click to Tweet)
Commercially Reasonable Effort
Many response times come with this disclaimer, which means that if it is too expensive for the support provider to respond quickly, they have the right to respond at a more convenient (and less costly) time.
If your network goes down over the weekend, the provider has the right to wait until Monday to respond if responding immediately is commercially unreasonable since it may require overtime payment to technicians.
In this type of contract, the provider is never at risk. Instead, all of the risk rests solely with the client.
Lack of a Refund Policy
Network maintenance agreements are incredibly costly. Yet, most OEM providers do not have an official refund policy.
Why? Because without a refund policy in place, it is much easier to avoid being held responsible for non-performance.
Be on the lookout for “cancel for credit” clauses and language that states that the support provider will only take responsibility for “the value of the contract.”
Cancel for Credit
If the business is unhappy with the provided support or needs to cancel the support on a specific piece of equipment (due to acquisition, network upgrades, etc.) the only restitution comes in the form of a credit that must be used for the same type of service.
This type of clause creates unnecessary expenses when decommissioning equipment and forces unnecessary and even risky equipment upgrades.
Only Responsible for the Value of the Contract
Let’s say the unthinkable happens, and your network goes down for several days. During that time, your employees are drawing earnings yet not producing. Your customers are growing irritated and may even begin searching for other providers.
Your network team is working overtime, and then, when everything is finally back up and running, your operations team must put in extra hours to make up for the lost time.
All of this equates to a total loss of $1.1 million.
In the end, it is determined that the outage was caused by a series of unfortunate events that all trace back to your network support provider.
The legal team steps in and begins the work of trying to recover that lost money from the provider. However, the contract specifically states that the provider is only responsible for the value of the contract, $450,000.
This means that at best, the outage caused by your support provider is going to cost the company a minimum of $650,000.
Be a yardstick of quality. Some people aren’t used to an environment where excellence is expected. – Steve Jobs (Click to Tweet)
Entitled Support Requirements
When you are confident that your support agreement is in good order, be sure to check that accessing that support is not hindered by requirements.
On first look, many entitled support access requirements appear reasonable.
Company name, contract number, login credentials, and contact name all seem like ordinary safeguards for accessing purchased support.
However, what happens if the company name provided during the support request differs slightly from the one on the contract?
For example, the legal company name may be Logistic Endeavors, Inc. However, within the company, there may be several divisions, including Logistic Engineering, Logistic Endeavors Sales, and many others.
When one of your employees calls for support, does he or she know which company name to provide? What about the contract number or login credentials of the primary contact on the contract?
In some cases, each of these requirements is designed to be a stopping point in the support process. Many OEM network support providers refuse support until the correct (contract matching) combination of identifying information is supplied.
In the meantime, the network downtime minutes are going up, and customer satisfaction is going down.
To avoid getting stuck in this situation, be sure that your SLA includes language that safeguards against support refusals. Look for “support will not be refused on the basis of non-identification” or similar language.
The best network maintenance providers support all customers of record using reasonable identifying information to get started. For example, company names that are common-sense matches are accepted, and all down equipment is treated as covered until proven different.
When a customer calls with an event, the support team immediately gets to work. If the troubleshooting and support trace back to non-covered equipment, the TAC team continues to operate while alerting the customer support team. The customer support team notifies the right contact at the customer, and any necessary contract negotiations are completed while support continues.
Network uptime is the priority…not denial of service.
Bottom line…Review Every Agreement Carefully
To avoid being trapped in contracts that serve the provider more than they support the client, have each SLA reviewed by your legal team, IT team, and purchasing team.
Be sure that each of these departments works together during the review to gain a comprehensive understanding of the limits of the contract. The goal is to create an agreement that meets the needs of the business without compromising support access with fine print and disclaimers.
Topics: Service Level Agreements