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Communications Service Providers falling short on SLAs, amid rise of Cloud & 4G services

Oct. 26, 2012

Research conducted by MDS has shown that a staggering 93% of CIOs and IT managers are still experiencing problems with Service Level Agreements (SLAs), despite the rise of managed services and cloud-based service models driving the need for robust, reliable and mutually protective agreements.

The report findings suggest that while SLAs for CSP’s business customers remain incredibly important in principle, their deployment and development is still, in practice, in need of significant improvement. Such improvements can provide real competitive differentiation and be business-winning for CSPs – the research found that 76% of respondents would choose one service provider over another if there were a more transparent and enforceable SLA on offer. This highlights a massive opportunity for CSPs who put SLA development higher up the value chain.

With the rapid adoption of cloud-based technologies and the growth of outsourced and managed services business models, transparency has become critical to ensuring both provider and customer are fulfilling responsibilities. This is reflected in the role SLAs play, with 59% of respondents advising they see them as more important in the current business environment where customer experience is under the microscope.

The importance of SLAs is also demonstrated by the frequency with which they are called upon. Of those surveyed, 36% called upon provider SLAs at least once a month and 34% every couple of months; significant indicators of quality of service issues.

Interestingly, from those most frequently called upon, 60% of the SLAs were developed by the service provider alone, compared to 32% determined by the customer, suggesting that the current balance of provider-determined SLA development is one which needs addressing in terms of customer focus.

Matt Hooper, CMO for MDS, commented, “Businesses are constantly adapting to embrace new technologies, but they should not have to accept a higher risk on communications service provision as a result. This research shows how important an equal footing is between the service provider and customer when delivering new services and business models, and the importance of transparency into SLAs for both parties. Long term strategic partnerships are built upon trust, and this can be reinforced through robust, mutually protective SLAs. Areas such as cloud services and the emergence of 4G will put all the more focus on SLAs as a strategic differentiator versus an under the cover part of the contract.”

The findings are the result of research conducted among 205 IT/Telecoms decision makers in the UK in April 2012.

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