December 29th, 2005

Can you trust your service provider?

Posted by Phil Wainewright @ 7:44 am

Categories: Managed services, Service level management

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How do you know that your service provider is actually delivering the 99.9% (or whatever) of uptime that you have been promised in the service contract? This is the question posed by Talkback contributor jmjames in response to my posting last week about service level commitments. He makes a number of excellent points, and this is the crux of his argument:

"Do you honestly think that a TPV [third party vendor] is going to accurately report to you their downtime or SLA misses? No way! I should know, I worked for quite a while for a major TPV in managed services, and I got to see first hand the lies that the customer was fed."

He’s absolutely right to raise this, because it’s an issue This kind of duplicity and deception has been rifethat on-demand providers have got to face up to. This kind of duplicity and deception has been rife among conventional managed service providers, with the result that the new generation of on-demand providers face an uphill battle in convincing customers that they’re any different. Maybe some of them aren’t, which makes the task even more difficult for those who are determined to act with integrity and transparency.

But if providers get this wrong — if they allow themselves to take the kind of short cuts with customer trust that jmjames describes — then they will consign their entire industry to the status of also-rans. The only way that providers can earn the lasting trust of customers is by dealing honestly and openly with them at all times — which can only happen if the provider instills a culture of integrity and plain dealing throughout its organization.

How do you achieve that? Here is my suggested five-point code of practice for on-demand providers. Customers should carefully evaluate how well their provider measures up to this list. If the provider falls short in any respect, then customers must ask why not, and if the answer they get back doesn’t satisfy them, they must seriously consider whether they really can trust their provider.

• Say exactly what the contract does and doesn’t deliver.
  Customers have a right to know what service levels they’re signing up for — and providers, who know a lot more about what can go wrong than prospective customers, have a duty to spell out what’s not included.
• Spell out what to do if something does go wrong.
  If the service is suddenly inaccessible, it helps a lot to know there’s another website users can go to for news, or that they’ll receive an email within the hour telling them what’s going on, or that the helpdesk is guaranteed to answer their phone call in less than five minutes — provided, of course, those procedures are robust enough to still work when all hell breaks loose at the provider’s support center!
• Report live service level metrics.
  All customers should be able to view the same dashboard for their services that the provider’s own operations staff get to see. If no such dashboard exists, then isn’t it high time the provider put one in? This is crucial to providing the accountability that jmjames so rightly argues for.
• Let customers download their data whenever they like.
  On-demand providers should go out of their way to make it as easy as possible for customers to move their data elsewhere (configuration data too, if applicable). Nothing else a provider can do offers a better expression of confidence in customer loyalty — except the next and final point.
• Accept 30 days’ notice of termination at any time, no questions asked.
  Even though larger customers prefer to negotiate two-year contracts, there’s still no reason to lock customers in for more than a month. As jmjames says, "With an in-house IT department, consistent failure equals (or should equal) termination of employment." Why should it be any different for on-demand providers? 

Customers can forgive imperfect performance, says jmjames, provided they get proper accountability. That’s why they prefer in-house services, with all their imperfections, to third-party providers. The code of practice I’ve outlined above may seem extreme or idealistic, but it’s necessary because on-demand providers have to go to extraordinary lengths to build equivalent customer confidence and trust.