Wednesday, February 15, 2012
Does your Vendor Know Small and Midsize Business?
The rules of engagement for small and midsize enterprises (SMEs) are changing. Speed, flexibility, responsiveness, personal service—the traditional hallmarks of small and midsize business success—can no longer be taken for granted. Your customers are a click away. And so are your competitors, especially large, global companies who are making smart use of technology to become more responsive and customer-driven.
To remain competitive, small and midsize companies need to evolve their technology strategies and infrastructures to meet these new challenges. The stakes are high: the investments you make today absorb scarce resources and will set you on a path that will impact your business for years to come.
How can you be sure that you are investing in the right solution? Obviously there are no guarantees, but your best insurance against making a costly mistake is to choose a vendor that is truly focused on the small and midsize market and isn’t just trying to fill the sales funnel with a lot of smaller clients. Look for vendors with these characteristics:
Right-sized for SMEs: Small and midsize businesses are constantly adapting to rapid shifts in the market. The right technology for your business is one that is designed to adapt to the way you work, with plenty of capacity and a wide range of software options. Be wary of underpowered consumer solutions or systems that were designed for larger enterprises but now have been “dumb downed” for the needs of small and midsize companies.
SME leadership: What is the company’s track record in meeting the expectations of the SME market? Is it a market leader or an also ran? Has the company innovated when it comes to SME solutions or are its real breakthroughs reserved for the better paying, larger clients?
Cost control and investment protection: Look beyond the initial acquisition cost. Total Cost of Ownership (TCO) is as important, if not more important to SMEs, than the initial outlay. How does the offering stack up in terms of ongoing operating costs, administration or upgrades?
Embracing new technology shouldn’t necessarily mean getting rid of older solutions, particularly if you are staying with the same vendor.
Reliability and energy efficiency: Every vendor will tout claims for reliability and consistent performance. It’s important to vet these pronouncements either with existing clients or independent analysts. Also, look carefully at the investment you will still need to make in backup capabilities. Does the solution have proactive diagnostic capabilities that will make your job easier? Are there alternatives to acquiring redundant hardware? Finally, how does the solution stack up in energy consumption? Is it really green?
Tuesday, January 24, 2012
Employee Morale and Productivity Go Beyond the Paycheck
In a recent article published by Inc. Magazine, employers
are looking for unique ways to improve employee morale in 2012. Increases in
paychecks are no longer the happy-maker that they used to be. Alternatives sighted in the article include
‘over communicating’, ‘celebrating wins’, and ‘keeping it real’. All in all, the biggest factor for most
employees is the ability to have work-life balance.
Once an anomaly for baby boomers pulling all-nighters at the
office to keep up with the Joneses, work-life balance actually has a standing
chance with today’s technologies– it’s called TELEWORKING.
For many business owners, just the thought of allowing
employees to work from home is daunting – they perceive it to ensure lost
control, lack of insight into employee productivity, and simply an
administrative nightmare. However,
according to Forbes' ”How Flexibility
Can Boost Employee Productivity”, teleworking is more about adapting your work
environment to accommodate for the ways in which your employees most thrive –
the end goal being to increase productivity.
According to an article published online by the Teleworking
Coalition “Will We Need Any More Office Space?”, teleworking, once considered
an alternative workspace strategy, began as a corporate cost-saving
measure. While cost savings is still a
predominant motivator, other factors have emerged to make the trend more
compelling for employers; employee satisfaction, enhanced productivity and
better teaming. As such, the use of teleworking has become not only an
alternate to leasing or buying more office space – it’s become a strategy to
secure top talent, increase employee productivity and job satisfaction, and in
many instances, improve the overall effectiveness of a workforce.
S-NET's revolutionary Q Box allows the teleworking employees to use lower cost circuits such as cable modem and DSL - without worrying about outages or poor voice quality. It allows businesses to connect remote offices into their system.
Wednesday, December 7, 2011
The Complete SNET Blog Guide to Service Level Agreements: Everything you need to know
What are Service Level Agreements (SLA's)?
A Service Level Agreements (SLA) is a contract between a service provider and customer that specifies what service will be provided, how it will be measured and in what timeframe it will be delivered. “SLAs” simply identify certain service levels or performance standards that the service provider must meet or exceed. The SLA also specifies the consequences for failure to achieve one or more service levels, such as credits granted to the customer on future invoices or rights of termination on behalf of the customer in certain instances. The SLA may also include credits or bonus incentives for performance that exceeds targets.
The linked concept of Service Level Management (or 'SLM') arises from the idea that, if you have agreed levels of service, you should have an agreed method of monitoring performance and dealing with exceptions and changes.
Why Do You Need SLA’s?
There are two major reasons to have a SLA, first, is to have the ability to measure the level of service being provided to the client and second, is to reap all the benefits from a well structured, well executed, enforceable SLA. The latter should be the desired outcome from any SLA the client constructs. This is an important point that is very often overlooked. Let’s take a look at an over simplified example (or is it?); let’s say you’re a retail store with business hours from 9 AM – 9 PM Monday - Saturday. You rely on your service provider in order to run your business. So you construct a SLA with your service provider that requires the availability of the services to be 99% excluding scheduled maintenance; however, you don’t specify hours of operation or days of the week in the SLA. The potential outcome is that the SLA could be measured on a 24 hour day / 365 days a year. The SLA could be met with 432 minutes a month of downtime, that’s more than 7 hours a month, 84 hours in a year! Ouch! Unfortunately, many times with newly established SLA’s the provider meets their SLA commitment; however, the client’s desired business outcome is not achieved, why, because SLA’s are not trivial to construct.
Hopefully, from the SLA example above it’s starting to become clear why SLA’s benefit both the client and provider. The main reason the client enters into a SLA contract with a provider is to receive a cost effective level of service that allows them to support and grow their business. The main reason the provider likes SLA’s is that the SLA clearly defines the scope of the deliverable that they will be compensated for. Therefore, the client needs to find a provider that will be flexible and willing to participate in a partnership that allows periodic updates to the SLA’s when the SLA are not meeting the client’s desired outcome. Without a partnership and the ability to work together to refine the SLA when appropriate, both sides will end up failing, as evidenced each year as thousands of clients file for divorce with their provider by either invoking the termination clause in their contract or just not renewing. However, with a strong partnership and clear roadmap through well-constructed SLA’s that can be modified and enforced the outcome could be a marriage made in heaven!
Key Elements of a Service Level Agreement
SLA's define an agreed service between two parties, whether it be internal departments or separate organizations. Below is a list of features you should consider when creating an SLA:
• What the service being provided is.
• The standard or quality of the service.
• The timetable for delivery.
• The responsibilities of the supplier and the customer.
• Provisions for legal and regulatory compliance.
• Mechanisms for monitoring and reporting of service.
• Any payment terms.
• How disputes will be resolved.
• Confidentiality and non-disclosure agreements.
• Termination conditions.
What Are SLAs?
Although in industry practice the SLA is a separate addendum to the outsourcing contract, it is not legally a separate agreement, but another set of terms and conditions of the services contract itself.
Structure of SLAs: Good, Bad, and Ugly
A good SLA will usually include a section that provides precise definitions of key terms. Next, specific service levels will be described in perhaps more than a dozen categories. In most cases, service level compliance is measured on a monthly basis.
From such service levels, the parties identify certain “key” service levels. Key service levels will be weighted by importance or severity so they total 100 percent. Then, if the outsourcer fails to achieve some of the key service levels, the percentage of key service levels missed for the month can be applied as a service level credit against a percentage of the invoice. If all the key service levels were missed in that month, then the full percentage service level credit could be given to the customer.
In some cases, the parties may choose to identify not only a threshold level of acceptable performance for each service level, but also a level of “increased impact” if the performance is at an agreed level below the threshold service level. If the outsourcer’s performance falls below the increased impact level, the percentage service credit may increase substantially.
Another factor that may be included in calculating service credits is a “frequency factor” that measures the number of times a particular service level is missed during an interval, such as a rolling 12-month period. If the frequency factor is triggered, the percentage to be applied against the total service credit is increased by some factor, for example, 1.5 or 2.0.
Just because certain service levels are not included in the “key service levels” does not mean they have no significance. First, they provide an objective measurement for tracking performance in areas that are important to the customer’s business and can spotlight the problem areas. Second, these non-key service levels are in fact contractual obligations which if not met, could form the basis of a claim of breach of contract by the customer.
Critical Conditions
Often the parties identify a subset of the key service levels as critical. For these critical service levels the parties will agree that the outsourcing contract may be terminated by the customer if the outsourcer fails to meet them at the frequency specified. Why is it important to include this type of provision? Contract law generally entitles one party to terminate a contract if the other party “materially breaches” the contract. A breach that isn’t “material” may entitle one party to claim damages, but it will not entitle that party to terminate the contract. Identifying the “critical” service levels and providing specific conditions for termination eliminates ambiguity in determining whether circumstances entitle the termination of a contract for cause as a material breach.
Force majeure!
Force majeure clauses excuse a party’s failure to perform if the failure resulted from an act of nature such as an earthquake or other natural disaster beyond the party’s control. In service provider contracts, negotiating the provisions of excused performance in the context of the service provider’s responsibilities and liabilities can be most challenging and time-consuming.
Examples include failures resulting from the customer’s non-performance, failures of third parties, and failures in hardware and software. Service providers seek a broad definition of force majeure and customers seek a narrow, tightly defined provision. Fair resolution lies somewhere in the middle. In any event, provisions should be included in the SLA addressing the outsourcer’s responsibility to correct and mitigate the effects of an excused performance failure. A force majeure event should not completely absolve the service provider from any responsibilities whatsoever.
9 Questions to Consider in an SLA Negotiation
Customers negotiating service provider contracts for the first time may be surprised to find that service providers are generally not proactive in proposing a fair and well designed SLA structure to the customer. Unfortunately, service providers may respond to a proposed SLA from the customer and negotiate in hopes that the customer will ultimately agree to an SLA that favors the service provider. There is clearly an opportunity for progressive service provider to distinguish their services by drawing on their experience in drafting and implementing an SLA structure that thoroughly addresses the customer’s needs in a fair manner.
Every customer must be prepared to know what they want and why they need the SLA, and be ready to convince the service provider. Reasonable customers will avoid over-measuring and including every imaginable service level. They should agree to fair credits for failures in meeting the service levels. Outsourcers should be willing to understand that the customer requires significant protection in the SLA, and acknowledge that there are certain levels of performance that would justify termination of the contract.
SLAs are not easy to design or negotiate. But a comprehensive, fair and effective SLA is critical for a successful outsourcing relationship. In the course of negotiating an SLA, customers and service provider have the opportunity to learn a lot about how their future partner will approach important issues in the relationship.
1. Which service levels will you measure?
Service levels are defined ways of measuring a service provider’s performance. A service level generally is a measure of the quality, speed, availability, capacity, reliability, user-friendliness, timeliness, conformity, efficiency or effectiveness of services.
A good service level is both within the service provider’s influence or control and an important measure of the success of the deal. A good service level is also designed to align the incentives of the service provider and the customer.
2. What will you measure, exactly, for each service level?
The parties must define the service level with precision. Unless each service level is precisely defined, the parties will not have a true agreement — a meeting of the minds — on service levels. Instead, you’ll have a situation where the customer believes that the service level measures A, B and C and the service provider believes it measures only A and B. When C fails, you’ll have a dispute that the SLA doesn’t address.
3. What process will you use to measure achieved performance?
For each service level, you need a process for measuring performance that the service provider achieves. The measurement process will affect the results. Thus, you need to know how service levels will be measured before you can decide how high to set the bar for performance.
The key issues in choosing a measurement process include:
Accuracy. A measurement process with a large margin of error puts more risk into the deal than one with a small margin of error.
Cost. The cost of a measurement process includes both the cost of running the measurement system and the burden that the process places on the people, computers and other resources that could otherwise be performing services.
Visibility. A good measurement system allows both parties both real-time access to data and the ability to audit historical data.
4. What is the measurement period?
The measurement period is the time horizon for measuring performance. Typically, the measurement period will be a month or quarter. Longer measurement periods give the service provider more opportunity to make up for bad performance. Shorter measurement periods give the service provider a “fresh start” more often. Longer measurement periods mean that more is at stake during any one measurement period.
The SLA should define not only how long the measurement period is but also how much of that time is within the measurement period. Is it 24×7 or 9×5? Does it include times when the service provider is shut down due to acts of war, terrorism, failure of its suppliers or other traditional force majeure events? Does it include periods when the demand for services exceeds the assumed levels?
5. What reports will be provided?
The SLA should require the supplier to make available clear, useful and timely reports on performance for each measurement period. The SLA should define precisely what information will appear on the reports, such as exception reports for missed service levels and trend reports for key service levels. The SLA might also require the service provider to conduct a root-cause analysis of service level failures and report the results to the customer.
6. How well will the service provider agree to perform?
Note that we’re at question number six, not question number one. Too often, people start with the number — say, 99.9% — and then start to define a service level. That’s the wrong order because the number is only meaningful when you know what’s being measured, who will measure it, how it will be measured and how often it will be reported.
The SLA can include both minimum service levels and target service levels. The service provider would be obligated to meet any minimum service levels, and failing to do so would be a breach of the outsourcing contract. The target service levels would be measured, and there might be service level credits associated with failure to meet them, but a failure generally would not be a breach of contract.
Customers should be wary of these pitfalls:
Agreeing to Existing Internal Service Levels. Some customers agree that the required service levels will be set at the customer’s existing internal performance. By doing so, they preserve the bad service that the outsourcing was designed to improve.
Agreeing to Agree on Service Levels. Some customers, eager to sign the contract, agree to work out service levels later. However, once the contract is signed, the deal team breaks up and the service provider has no incentive to agree to challenging service levels. Thus, no service levels are ever developed.
Agreeing to Fix Service Levels at Initial service provider Performance. Some customers, with no basis for setting service levels, agree to set them at whatever levels the service provider can achieve during the initial months of the contract. This gives the vendor an incentive to hold down service levels during those initial transitional months, that is, during the most perilous time in the contract term.
Setting the Wrong Incentives. Some customers ignore the idea that the supplier will “manage to the money.”
Asking for the Moon. Some customers demand unnecessarily high performance commitments. Providing better service requires the service provider to use, for example, redundant systems, excess capacity and better technology. Asking for better service than you need means paying more than you need to pay.
7. Will the minimum and target service levels change over time?
The SLA may include not fixed but floating performance commitments. Particularly in long-term, large-scale outsourcing agreements, SLAs may increase the performance commitments through:
Contractual Ramp-Ups. The SLA can include a fixed schedule of increasing requirements.
External Metrics. The SLA can base the service level on an outside measure of acceptable or achievable performance.
Supplier Performance. The SLA can ramp up the performance requirement based on the service provider’s actual performance. For example, for each year, the target performance could be increased by a percentage of the amount by which the service provider’s actual prior-year performance exceeded the target performance.
8. Will the SLA include service level credits?
A “service level credit” is a credit that the service provider grants to the customer after a service level failure. The service provider may be required to write a check to the customer or the customer may simply have the right to apply the credit to future service. Either way, it reduces the effective price of the services and the service provider’s profit margin.
As an example, an SLA might call for service level credits for any of 10 service levels. For each of those 10 service levels, the SLA might indicate a number of “credits” to be granted upon a failure, with each “credit” being a small percentage of the customer’s total bill for the measurement period.
The total service level credits for a measurement period might be capped at, say, 10% or 15% of the total monthly bill. This means that, although poor performance could reduce the supplier’s profit margin, it would not create a loss for the service provider. The total pool of service level credits (that is, the total service level credits payable if the supplier misses every service level) would then be some multiple of the cap.
There are many variations on this theme. Some SLAs impose credits only for repeatedly missing required service levels. Some SLAs allow the service provider to earn back service level credits for subsequent good performance, or to use superior performance to get “Get Out of Jail Free” cards to avoid future service level credits. Some SLAs have entire schedules of credits for a single service level, with larger service level credits for larger or repeated violations.
Service level credits are an incentive system. Smart customers design the service level credit structure on obtaining good performance throughout the contract term. They also retain the right to revise the service level credit structure so that they can re-align the incentives as their priorities change.
One important question is whether the service level credits are the customer’s sole remedy for a breach or merely one of the customer’s remedies. This is an area where loose contract language can have surprising results.
9. When does failure to meet service levels allow termination for cause?
Outsourcing agreements, generally, can be terminated for cause upon a material breach. A sufficiently severe service level failure would be a material breach. However, without clear language in the SLA, the parties might argue about whether a service level failure is sufficiently severe to be a material breach.
The SLA can provide increased certainty by defining particular events that, without argument, allow termination for cause. You can set minimum service levels at the level that allows termination. You can also define an amount of accumulated service level failures that allow termination for cause. For example, termination for cause might be allowed if the service provider breaches a single service level three times in succession, or the supplier breaches enough service levels that the service level credits are limited by the cap. The effect is to give the customer a clear exit right for substandard performance.
A Service Level Agreements (SLA) is a contract between a service provider and customer that specifies what service will be provided, how it will be measured and in what timeframe it will be delivered. “SLAs” simply identify certain service levels or performance standards that the service provider must meet or exceed. The SLA also specifies the consequences for failure to achieve one or more service levels, such as credits granted to the customer on future invoices or rights of termination on behalf of the customer in certain instances. The SLA may also include credits or bonus incentives for performance that exceeds targets.
The linked concept of Service Level Management (or 'SLM') arises from the idea that, if you have agreed levels of service, you should have an agreed method of monitoring performance and dealing with exceptions and changes.
Why Do You Need SLA’s?
There are two major reasons to have a SLA, first, is to have the ability to measure the level of service being provided to the client and second, is to reap all the benefits from a well structured, well executed, enforceable SLA. The latter should be the desired outcome from any SLA the client constructs. This is an important point that is very often overlooked. Let’s take a look at an over simplified example (or is it?); let’s say you’re a retail store with business hours from 9 AM – 9 PM Monday - Saturday. You rely on your service provider in order to run your business. So you construct a SLA with your service provider that requires the availability of the services to be 99% excluding scheduled maintenance; however, you don’t specify hours of operation or days of the week in the SLA. The potential outcome is that the SLA could be measured on a 24 hour day / 365 days a year. The SLA could be met with 432 minutes a month of downtime, that’s more than 7 hours a month, 84 hours in a year! Ouch! Unfortunately, many times with newly established SLA’s the provider meets their SLA commitment; however, the client’s desired business outcome is not achieved, why, because SLA’s are not trivial to construct.
Hopefully, from the SLA example above it’s starting to become clear why SLA’s benefit both the client and provider. The main reason the client enters into a SLA contract with a provider is to receive a cost effective level of service that allows them to support and grow their business. The main reason the provider likes SLA’s is that the SLA clearly defines the scope of the deliverable that they will be compensated for. Therefore, the client needs to find a provider that will be flexible and willing to participate in a partnership that allows periodic updates to the SLA’s when the SLA are not meeting the client’s desired outcome. Without a partnership and the ability to work together to refine the SLA when appropriate, both sides will end up failing, as evidenced each year as thousands of clients file for divorce with their provider by either invoking the termination clause in their contract or just not renewing. However, with a strong partnership and clear roadmap through well-constructed SLA’s that can be modified and enforced the outcome could be a marriage made in heaven!
Key Elements of a Service Level Agreement
SLA's define an agreed service between two parties, whether it be internal departments or separate organizations. Below is a list of features you should consider when creating an SLA:
• What the service being provided is.
• The standard or quality of the service.
• The timetable for delivery.
• The responsibilities of the supplier and the customer.
• Provisions for legal and regulatory compliance.
• Mechanisms for monitoring and reporting of service.
• Any payment terms.
• How disputes will be resolved.
• Confidentiality and non-disclosure agreements.
• Termination conditions.
What Are SLAs?
Although in industry practice the SLA is a separate addendum to the outsourcing contract, it is not legally a separate agreement, but another set of terms and conditions of the services contract itself.
Structure of SLAs: Good, Bad, and Ugly
A good SLA will usually include a section that provides precise definitions of key terms. Next, specific service levels will be described in perhaps more than a dozen categories. In most cases, service level compliance is measured on a monthly basis.
From such service levels, the parties identify certain “key” service levels. Key service levels will be weighted by importance or severity so they total 100 percent. Then, if the outsourcer fails to achieve some of the key service levels, the percentage of key service levels missed for the month can be applied as a service level credit against a percentage of the invoice. If all the key service levels were missed in that month, then the full percentage service level credit could be given to the customer.
In some cases, the parties may choose to identify not only a threshold level of acceptable performance for each service level, but also a level of “increased impact” if the performance is at an agreed level below the threshold service level. If the outsourcer’s performance falls below the increased impact level, the percentage service credit may increase substantially.
Another factor that may be included in calculating service credits is a “frequency factor” that measures the number of times a particular service level is missed during an interval, such as a rolling 12-month period. If the frequency factor is triggered, the percentage to be applied against the total service credit is increased by some factor, for example, 1.5 or 2.0.
Just because certain service levels are not included in the “key service levels” does not mean they have no significance. First, they provide an objective measurement for tracking performance in areas that are important to the customer’s business and can spotlight the problem areas. Second, these non-key service levels are in fact contractual obligations which if not met, could form the basis of a claim of breach of contract by the customer.
Critical Conditions
Often the parties identify a subset of the key service levels as critical. For these critical service levels the parties will agree that the outsourcing contract may be terminated by the customer if the outsourcer fails to meet them at the frequency specified. Why is it important to include this type of provision? Contract law generally entitles one party to terminate a contract if the other party “materially breaches” the contract. A breach that isn’t “material” may entitle one party to claim damages, but it will not entitle that party to terminate the contract. Identifying the “critical” service levels and providing specific conditions for termination eliminates ambiguity in determining whether circumstances entitle the termination of a contract for cause as a material breach.
Force majeure!
Force majeure clauses excuse a party’s failure to perform if the failure resulted from an act of nature such as an earthquake or other natural disaster beyond the party’s control. In service provider contracts, negotiating the provisions of excused performance in the context of the service provider’s responsibilities and liabilities can be most challenging and time-consuming.
Examples include failures resulting from the customer’s non-performance, failures of third parties, and failures in hardware and software. Service providers seek a broad definition of force majeure and customers seek a narrow, tightly defined provision. Fair resolution lies somewhere in the middle. In any event, provisions should be included in the SLA addressing the outsourcer’s responsibility to correct and mitigate the effects of an excused performance failure. A force majeure event should not completely absolve the service provider from any responsibilities whatsoever.
9 Questions to Consider in an SLA Negotiation
Customers negotiating service provider contracts for the first time may be surprised to find that service providers are generally not proactive in proposing a fair and well designed SLA structure to the customer. Unfortunately, service providers may respond to a proposed SLA from the customer and negotiate in hopes that the customer will ultimately agree to an SLA that favors the service provider. There is clearly an opportunity for progressive service provider to distinguish their services by drawing on their experience in drafting and implementing an SLA structure that thoroughly addresses the customer’s needs in a fair manner.
Every customer must be prepared to know what they want and why they need the SLA, and be ready to convince the service provider. Reasonable customers will avoid over-measuring and including every imaginable service level. They should agree to fair credits for failures in meeting the service levels. Outsourcers should be willing to understand that the customer requires significant protection in the SLA, and acknowledge that there are certain levels of performance that would justify termination of the contract.
SLAs are not easy to design or negotiate. But a comprehensive, fair and effective SLA is critical for a successful outsourcing relationship. In the course of negotiating an SLA, customers and service provider have the opportunity to learn a lot about how their future partner will approach important issues in the relationship.
1. Which service levels will you measure?
Service levels are defined ways of measuring a service provider’s performance. A service level generally is a measure of the quality, speed, availability, capacity, reliability, user-friendliness, timeliness, conformity, efficiency or effectiveness of services.
A good service level is both within the service provider’s influence or control and an important measure of the success of the deal. A good service level is also designed to align the incentives of the service provider and the customer.
2. What will you measure, exactly, for each service level?
The parties must define the service level with precision. Unless each service level is precisely defined, the parties will not have a true agreement — a meeting of the minds — on service levels. Instead, you’ll have a situation where the customer believes that the service level measures A, B and C and the service provider believes it measures only A and B. When C fails, you’ll have a dispute that the SLA doesn’t address.
3. What process will you use to measure achieved performance?
For each service level, you need a process for measuring performance that the service provider achieves. The measurement process will affect the results. Thus, you need to know how service levels will be measured before you can decide how high to set the bar for performance.
The key issues in choosing a measurement process include:
Accuracy. A measurement process with a large margin of error puts more risk into the deal than one with a small margin of error.
Cost. The cost of a measurement process includes both the cost of running the measurement system and the burden that the process places on the people, computers and other resources that could otherwise be performing services.
Visibility. A good measurement system allows both parties both real-time access to data and the ability to audit historical data.
4. What is the measurement period?
The measurement period is the time horizon for measuring performance. Typically, the measurement period will be a month or quarter. Longer measurement periods give the service provider more opportunity to make up for bad performance. Shorter measurement periods give the service provider a “fresh start” more often. Longer measurement periods mean that more is at stake during any one measurement period.
The SLA should define not only how long the measurement period is but also how much of that time is within the measurement period. Is it 24×7 or 9×5? Does it include times when the service provider is shut down due to acts of war, terrorism, failure of its suppliers or other traditional force majeure events? Does it include periods when the demand for services exceeds the assumed levels?
5. What reports will be provided?
The SLA should require the supplier to make available clear, useful and timely reports on performance for each measurement period. The SLA should define precisely what information will appear on the reports, such as exception reports for missed service levels and trend reports for key service levels. The SLA might also require the service provider to conduct a root-cause analysis of service level failures and report the results to the customer.
6. How well will the service provider agree to perform?
Note that we’re at question number six, not question number one. Too often, people start with the number — say, 99.9% — and then start to define a service level. That’s the wrong order because the number is only meaningful when you know what’s being measured, who will measure it, how it will be measured and how often it will be reported.
The SLA can include both minimum service levels and target service levels. The service provider would be obligated to meet any minimum service levels, and failing to do so would be a breach of the outsourcing contract. The target service levels would be measured, and there might be service level credits associated with failure to meet them, but a failure generally would not be a breach of contract.
Customers should be wary of these pitfalls:
Agreeing to Existing Internal Service Levels. Some customers agree that the required service levels will be set at the customer’s existing internal performance. By doing so, they preserve the bad service that the outsourcing was designed to improve.
Agreeing to Agree on Service Levels. Some customers, eager to sign the contract, agree to work out service levels later. However, once the contract is signed, the deal team breaks up and the service provider has no incentive to agree to challenging service levels. Thus, no service levels are ever developed.
Agreeing to Fix Service Levels at Initial service provider Performance. Some customers, with no basis for setting service levels, agree to set them at whatever levels the service provider can achieve during the initial months of the contract. This gives the vendor an incentive to hold down service levels during those initial transitional months, that is, during the most perilous time in the contract term.
Setting the Wrong Incentives. Some customers ignore the idea that the supplier will “manage to the money.”
Asking for the Moon. Some customers demand unnecessarily high performance commitments. Providing better service requires the service provider to use, for example, redundant systems, excess capacity and better technology. Asking for better service than you need means paying more than you need to pay.
7. Will the minimum and target service levels change over time?
The SLA may include not fixed but floating performance commitments. Particularly in long-term, large-scale outsourcing agreements, SLAs may increase the performance commitments through:
Contractual Ramp-Ups. The SLA can include a fixed schedule of increasing requirements.
External Metrics. The SLA can base the service level on an outside measure of acceptable or achievable performance.
Supplier Performance. The SLA can ramp up the performance requirement based on the service provider’s actual performance. For example, for each year, the target performance could be increased by a percentage of the amount by which the service provider’s actual prior-year performance exceeded the target performance.
8. Will the SLA include service level credits?
A “service level credit” is a credit that the service provider grants to the customer after a service level failure. The service provider may be required to write a check to the customer or the customer may simply have the right to apply the credit to future service. Either way, it reduces the effective price of the services and the service provider’s profit margin.
As an example, an SLA might call for service level credits for any of 10 service levels. For each of those 10 service levels, the SLA might indicate a number of “credits” to be granted upon a failure, with each “credit” being a small percentage of the customer’s total bill for the measurement period.
The total service level credits for a measurement period might be capped at, say, 10% or 15% of the total monthly bill. This means that, although poor performance could reduce the supplier’s profit margin, it would not create a loss for the service provider. The total pool of service level credits (that is, the total service level credits payable if the supplier misses every service level) would then be some multiple of the cap.
There are many variations on this theme. Some SLAs impose credits only for repeatedly missing required service levels. Some SLAs allow the service provider to earn back service level credits for subsequent good performance, or to use superior performance to get “Get Out of Jail Free” cards to avoid future service level credits. Some SLAs have entire schedules of credits for a single service level, with larger service level credits for larger or repeated violations.
Service level credits are an incentive system. Smart customers design the service level credit structure on obtaining good performance throughout the contract term. They also retain the right to revise the service level credit structure so that they can re-align the incentives as their priorities change.
One important question is whether the service level credits are the customer’s sole remedy for a breach or merely one of the customer’s remedies. This is an area where loose contract language can have surprising results.
9. When does failure to meet service levels allow termination for cause?
Outsourcing agreements, generally, can be terminated for cause upon a material breach. A sufficiently severe service level failure would be a material breach. However, without clear language in the SLA, the parties might argue about whether a service level failure is sufficiently severe to be a material breach.
The SLA can provide increased certainty by defining particular events that, without argument, allow termination for cause. You can set minimum service levels at the level that allows termination. You can also define an amount of accumulated service level failures that allow termination for cause. For example, termination for cause might be allowed if the service provider breaches a single service level three times in succession, or the supplier breaches enough service levels that the service level credits are limited by the cap. The effect is to give the customer a clear exit right for substandard performance.
The Fiber Primer: Basics for Your Review on Voice and data services available on fiber optic from S-NET
Fiber Internet is better for a few reasons: [1] it's "dedicated" just for your use (not split off and shared with others nearby) [2] it's symmetrical (which usually also means FULL duplex, instead of half duplex, in other words: download and upload can occur simultaneously) [3] bandwidth is truly UNLIMITED, no hidden caps [4] includes a Service Level Agreement (SLA) which guarantees time/performance/throughput.
Generally speaking, symmetrical type bandwidth is considered "commercial grade" and tends to be used by the SMB/Enterprise market VS. consumer/residential end users. All because of the reasons I listed above, plus it lends itself to work better in a LAN environment- as the circuit is robust, efficient, and quite reliable, etc. You really get what you pay for. Finally, if you have applications that require real time traffic, such as: VoIP, SIP, and video conferencing + Citrix, VPN, heavy file transfer- commercial bandwidth (T1, DS3, Metro Fiber Ethernet) is essential.
Optical carrier services such as SONET and Gigabit Ethernet are becoming more available and less expensive as the need for bandwidth increases to support such applications as enterprise VoIP, tele-radiology, off site data backup for disaster recovery and video transport.
SONET, the Classic Optical Carrier
SONET is an acronym for Synchronous Optical Network. SONET was developed as a set of standards for telephone carriers in the mid-1980's. SONET picks up where lower speed trunk lines leave off but still maintains compatibility at the digital signal level.
For instance, the basic signal level for SONET circuits is STS-1 for synchronous transport signal. It's speed is 51.84 Mbps which is capable of carrying 1 DS3. A DS3 is the same digital signal level used by a 45 Mbps T3 line in the copper type carrier world. It is also the capacity of 28 DS-1 signals, the same as 28 T1 lines. When carried on fiber optic cable, a STS-1 signal is called an OC-1. An OC3 line would be the equivalent of 3 T3 lines and an OC48 would have the same capacity of 48 T3 lines.
SONET was designed to carry telephone conversations, so it handles the TDM (time division multiplexing) digital voice channels from PBX and telephone carrier switches easily. Because it is synchronized like the T-carriers, you can add or remove channels at will with an add-drop multiplexer. This makes it easy to interconnect a group of locations in a regional or even nationwide network.
SONET can be provisioned as a point to point circuit or hub and spoke star network, but the protocol really shines when it is set up as a ring of two independent loops. The system is designed to automatically switch from the main to the backup loop in 50 milliseconds or less if a fault occurs. This is called automatic protection switching.
Data over SONET
Like T1, SONET was originally designed to handle high capacity telephone traffic in digital format. It has since been used to carry high speed digital traffic, including backbone service for Internet Service Providers. ATM, Frame Relay, and Ethernet protocol signals can all be encapsulated and sent over SONET ring networks. If you are using a T1 or T3 data line now, it may well be carried by an optical network and dropped off and converted to the copper signal format at your location.
IP Services
Internet Protocol has become the defacto standard for data communications. Switched Ethernet networks running at 10 Mbps, Fast Ethernet at 100 Mbps, Gigabit Ethernet at 1 Gbps and 10 Gig Ethernet at 10 Gbps are the basic network speeds for large and small enterprises alike. The beauty of IP based services is that a corporate network in one city can connect via an Ethernet service provisioned on fiber optic cable to a similar network in another city and they'll work like one big network. The fiber optic circuit is simply a long, very long, network cable.
The current trend is to convert everything into IP format so that telephone calls, file transfers, Internet service and video conferencing can share the same network. That process is called convergence. Converging all those proprietary networks into one big one often has cost savings benefits especially at the enterprise level. You'll just have to be sure to have enough network bandwidth to handle all the extra data packets and quality of service management tools to ensure that voice and video signals get the priority they need to run as well as they did on their own networks.
Generally speaking, symmetrical type bandwidth is considered "commercial grade" and tends to be used by the SMB/Enterprise market VS. consumer/residential end users. All because of the reasons I listed above, plus it lends itself to work better in a LAN environment- as the circuit is robust, efficient, and quite reliable, etc. You really get what you pay for. Finally, if you have applications that require real time traffic, such as: VoIP, SIP, and video conferencing + Citrix, VPN, heavy file transfer- commercial bandwidth (T1, DS3, Metro Fiber Ethernet) is essential.
Optical carrier services such as SONET and Gigabit Ethernet are becoming more available and less expensive as the need for bandwidth increases to support such applications as enterprise VoIP, tele-radiology, off site data backup for disaster recovery and video transport.
SONET, the Classic Optical Carrier
SONET is an acronym for Synchronous Optical Network. SONET was developed as a set of standards for telephone carriers in the mid-1980's. SONET picks up where lower speed trunk lines leave off but still maintains compatibility at the digital signal level.
For instance, the basic signal level for SONET circuits is STS-1 for synchronous transport signal. It's speed is 51.84 Mbps which is capable of carrying 1 DS3. A DS3 is the same digital signal level used by a 45 Mbps T3 line in the copper type carrier world. It is also the capacity of 28 DS-1 signals, the same as 28 T1 lines. When carried on fiber optic cable, a STS-1 signal is called an OC-1. An OC3 line would be the equivalent of 3 T3 lines and an OC48 would have the same capacity of 48 T3 lines.
SONET was designed to carry telephone conversations, so it handles the TDM (time division multiplexing) digital voice channels from PBX and telephone carrier switches easily. Because it is synchronized like the T-carriers, you can add or remove channels at will with an add-drop multiplexer. This makes it easy to interconnect a group of locations in a regional or even nationwide network.
SONET can be provisioned as a point to point circuit or hub and spoke star network, but the protocol really shines when it is set up as a ring of two independent loops. The system is designed to automatically switch from the main to the backup loop in 50 milliseconds or less if a fault occurs. This is called automatic protection switching.
Data over SONET
Like T1, SONET was originally designed to handle high capacity telephone traffic in digital format. It has since been used to carry high speed digital traffic, including backbone service for Internet Service Providers. ATM, Frame Relay, and Ethernet protocol signals can all be encapsulated and sent over SONET ring networks. If you are using a T1 or T3 data line now, it may well be carried by an optical network and dropped off and converted to the copper signal format at your location.
IP Services
Internet Protocol has become the defacto standard for data communications. Switched Ethernet networks running at 10 Mbps, Fast Ethernet at 100 Mbps, Gigabit Ethernet at 1 Gbps and 10 Gig Ethernet at 10 Gbps are the basic network speeds for large and small enterprises alike. The beauty of IP based services is that a corporate network in one city can connect via an Ethernet service provisioned on fiber optic cable to a similar network in another city and they'll work like one big network. The fiber optic circuit is simply a long, very long, network cable.
The current trend is to convert everything into IP format so that telephone calls, file transfers, Internet service and video conferencing can share the same network. That process is called convergence. Converging all those proprietary networks into one big one often has cost savings benefits especially at the enterprise level. You'll just have to be sure to have enough network bandwidth to handle all the extra data packets and quality of service management tools to ensure that voice and video signals get the priority they need to run as well as they did on their own networks.
Tuesday, November 29, 2011
STRATEGIES FOR FINDING CUSTOMERS—AND KEEPING THEM LOYAL
There are essentially two ways to increases sales: find more customers or find new ways to sell more things to the customers you already have. Both strategies are important, but often one or the other gets short shrift.
In a start-up, when the focus is on new customer acquisition, it’s easy to overlook upselling opportunities.
Over time, as a company gets more established, the focus shifts to upgrades and add ons for existing customers. Finding new customers may get the backseat.
Getting both acquisition and retention/upsell strategies working together is the key to smart marketing. You need new customers to replace inevitable attrition and stay innovative. At the same time, keeping current customers loyal pays huge rewards: a 5% reduction in your customer defection rate can increase profits by 25% to 80%.Here are five ways to keep your acquisition and retention strategies in balance:
Know your value: Regularly ask yourself, “Who is my customer and what value am I delivering?” Focus on problems you are solving for your existing customers that helps make them more competitive in today’s economy? Apply what you have learned to markets/customers you haven’t tapped yet.
Know the competition: Instead of simply trying to beat the competition, analyze what they are doing and how it impacts your acquisition and retention strategies. What problems do your competitors solve that makes them attractive to new customers and gives them the potential to make inroads on your current customer base?
Know the decision makers: Remember that the people making a buying decision do not always have the same set of criteria as the person actually using your product. That’s why simply repeating your core marketing message to decision makers won’t work. You have to target their hot buttons—how are you making their life easier? Helping them achieve their goals? What could make the decision maker at a prospect choose someone else, or at an existing customer decide not to remain loyal?
Make it easy for new and existing customers to reach: Give new customers, existing customers and decision makers the option to “self-select” on your website. Use the capabilities in your communications system—such as customized routing, hunt groups, multiple incoming lines, and connections to salesforce.com etc.— to get a streamlined presence on the phone that’s critical for both acquisition and retention strategies.
In a start-up, when the focus is on new customer acquisition, it’s easy to overlook upselling opportunities.
Over time, as a company gets more established, the focus shifts to upgrades and add ons for existing customers. Finding new customers may get the backseat.
Getting both acquisition and retention/upsell strategies working together is the key to smart marketing. You need new customers to replace inevitable attrition and stay innovative. At the same time, keeping current customers loyal pays huge rewards: a 5% reduction in your customer defection rate can increase profits by 25% to 80%.Here are five ways to keep your acquisition and retention strategies in balance:
Know your value: Regularly ask yourself, “Who is my customer and what value am I delivering?” Focus on problems you are solving for your existing customers that helps make them more competitive in today’s economy? Apply what you have learned to markets/customers you haven’t tapped yet.
Know the competition: Instead of simply trying to beat the competition, analyze what they are doing and how it impacts your acquisition and retention strategies. What problems do your competitors solve that makes them attractive to new customers and gives them the potential to make inroads on your current customer base?
Know the decision makers: Remember that the people making a buying decision do not always have the same set of criteria as the person actually using your product. That’s why simply repeating your core marketing message to decision makers won’t work. You have to target their hot buttons—how are you making their life easier? Helping them achieve their goals? What could make the decision maker at a prospect choose someone else, or at an existing customer decide not to remain loyal?
Make it easy for new and existing customers to reach: Give new customers, existing customers and decision makers the option to “self-select” on your website. Use the capabilities in your communications system—such as customized routing, hunt groups, multiple incoming lines, and connections to salesforce.com etc.— to get a streamlined presence on the phone that’s critical for both acquisition and retention strategies.
Tuesday, November 8, 2011
This Winter is going to be Rough - Do you have your Communications Continuity Plan in Place?
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According to their website, The AccuWeather.com Long-Range Forecasting Team is predicting another brutally cold and snowy winter for a large part of the country, thanks in large part to La Niña... yet again.
La Niña, a phenomenon that occurs when sea surface temperatures across the equatorial central and eastern Pacific are below normal, is what made last year's winter so awful for the Midwest and Northeast. Monster blizzards virtually shut down the cities of New York and Chicago. Last winter was one of New York City's snowiest on record.
La Niñas often produce a volatile weather pattern for the Midwest and Northeast during winter due to the influence they have on the jet stream. The graphic above shows the position the jet stream typically takes over the U.S. during La Niña.
So, besides dealing with a lot of snow and ice, what does this mean for your business and how are you preparing for it?
Here are some valuable thoughts on what you should be doing for communications continuity planning.
1.Employees: Do you have a method to notify employees about snow days – when not to come to the office? It may sound mundane, but if you don’t, then the costs can be significant as soon as hourly employees start clocking in on days that the business is closed.
Suggestion: A written policy that is communicated to all employees about snow days that includes:
Will they be announced by an email or by a phone tree?
Who will be sending the email or making the calls?
When will this be determined?
How will at home employees be compensated?
What work activities are they expected to do from home?
2. Customers: How will you notify your customers that your business is closed?
Suggestion: A written policy communicated to your key sales staff
Will you announce via an email or phone tree?
Who will be sending the email or making the calls?
How will your automated attendant greeting be changed? By whom? Saying what? When?
3. Practice Beforehand! Don’t wait until your first snow day to practice implementing your plan. You should have a dry run
If you are using emails to communicate to your clients, make sure that the database is accurate. Make sure that the phone numbers for employees are accurate.
Make sure that you can change greetings.
4. Recommendations: Did you know that IP based systems and can enhance your ability to function on days when you can’t get to the office? S-NET Hosted Solutions can enable your work at home employees to log in remotely and work as if they were in the office. When combined with remote login capabilities on your network, your employees can work – answering calls, dealing with clients as if they were at their desks.
It looks like it is going to be another long, hard winter. We know what to expect – but the key is getting ready in advance. I remember the story about an out of work actor who finally got a one line part in a play. He had to say “Hark, I hear the cannons roar”. This actor practiced his line- on the subway, walking to the theater, in make up. Finally, he gets on stage, hears a loud BOOM- and yells “What the hell was that!?”. Moral of the story: Don’t wait until Mother Nature drops a foot of snow overnight. Make sure you have a plan that has been practiced and works!
Tuesday, November 1, 2011
5 Questions To Ask Yourself About Your Current Phone System
In today's competitive business environment, every sale is critical, every resource precious. And, every dollar spent has to drive bottom line results. That's why it's important for you to assess your current communication system. Here's five questions you should ask yourself:
1. How much do you know about callers before you pick up the phone?
We are all familiar with traditional caller ID, but now you can take it to another level.
S-NET Hosted PBX gives you instant access to your database before you answer the phone. If the caller is a prospect or customer, your sales team will have a full profile and contact history before they say, "Hello." Your team is better informed, and their calls are more effective.
2. How many phone numbers do customers need to reach you?
Making your customers hunt for the right number — and potentially be unable to reach you — slows transactions and reduces customer satisfaction.
With S-NET, one number — the office number — is all an employee needs to give out because your system knows where to forward each call. We call it "one number reachability" and your customers will love it.
3. Is setting up a conference call complicated and costly?
Conference calls have become a way of life for businesses. With IP Office, you no longer have to connect to a third party to hold your conference calls. You can start a conference call from your own phone at a moment’s notice. It’s fast, easy and free.
And for last-minute invitations, you can use SNET’s co-worker presence panel to check other colleagues’ availability to join the meeting.
4. Can your employees still conduct business while traveling?
When your staff is on the road, you can’t afford to let problems or order requests wait until the right person returns to the office.
With S-NET, your employees who work outside the office — whether full time or out due to an unforeseen situation — can access all of the same communications tools available in the office. From the home, a hotel room, an airplane terminal or almost anywhere, they can stay on top of their work so nothing slips through the cracks.
IP Office can also convert your voicemails into e-mails and send them so your team members get instant notification, retrieve all their messages and have the ability to reply ASAP.
5. Are you able to adjust to periodic fluctuations in call volume?
Whether you use a traditional call center or simply have people answer phones, managing call volume is important to customer satisfaction. Even if you’re busy, customers don’t want to hear busy signals.
S-NET Call Center Suite gives you the technology and tools you need to quickly adjust your call handling capability with fluctuations in call volume. By identifying peaks and valleys of your business calls, you can adjust your staffing and make better use of call recordings to minimize wait time and reduce caller frustration.
With S-NET Call Center Suite’s customer service applications for agents and supervisors, you’ll communicate more effectively with agents through wallboard displays — and you’ll get detailed data on calling patterns to help drive more effective sales campaigns and day-to-day selling performance.
Visit http://www.snetconnect.com to learn more today!
1. How much do you know about callers before you pick up the phone?
We are all familiar with traditional caller ID, but now you can take it to another level.
S-NET Hosted PBX gives you instant access to your database before you answer the phone. If the caller is a prospect or customer, your sales team will have a full profile and contact history before they say, "Hello." Your team is better informed, and their calls are more effective.
2. How many phone numbers do customers need to reach you?
Making your customers hunt for the right number — and potentially be unable to reach you — slows transactions and reduces customer satisfaction.
With S-NET, one number — the office number — is all an employee needs to give out because your system knows where to forward each call. We call it "one number reachability" and your customers will love it.
3. Is setting up a conference call complicated and costly?
Conference calls have become a way of life for businesses. With IP Office, you no longer have to connect to a third party to hold your conference calls. You can start a conference call from your own phone at a moment’s notice. It’s fast, easy and free.
And for last-minute invitations, you can use SNET’s co-worker presence panel to check other colleagues’ availability to join the meeting.
4. Can your employees still conduct business while traveling?
When your staff is on the road, you can’t afford to let problems or order requests wait until the right person returns to the office.
With S-NET, your employees who work outside the office — whether full time or out due to an unforeseen situation — can access all of the same communications tools available in the office. From the home, a hotel room, an airplane terminal or almost anywhere, they can stay on top of their work so nothing slips through the cracks.
IP Office can also convert your voicemails into e-mails and send them so your team members get instant notification, retrieve all their messages and have the ability to reply ASAP.
5. Are you able to adjust to periodic fluctuations in call volume?
Whether you use a traditional call center or simply have people answer phones, managing call volume is important to customer satisfaction. Even if you’re busy, customers don’t want to hear busy signals.
S-NET Call Center Suite gives you the technology and tools you need to quickly adjust your call handling capability with fluctuations in call volume. By identifying peaks and valleys of your business calls, you can adjust your staffing and make better use of call recordings to minimize wait time and reduce caller frustration.
With S-NET Call Center Suite’s customer service applications for agents and supervisors, you’ll communicate more effectively with agents through wallboard displays — and you’ll get detailed data on calling patterns to help drive more effective sales campaigns and day-to-day selling performance.
Visit http://www.snetconnect.com to learn more today!
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