At a time of transition in the telecoms landscape, as cloud and 4G services gain prominence, communications service providers (CSPs) continue to struggle to meet pre-defined service level agreements (SLAs), according to research by MDS.
The survey, carried out among 205 IT and telecom decision-makers, found that 93% of respondents still experience problems with the SLAs they hold with their CSPs.
SLAs remain essential for businesses to monitor the value they receive, yet CSPs must do more to build customer confidence and reduce concerns about performance and accountability.
For CSPs, improving SLA delivery and transparency is a major opportunity to strengthen customer loyalty: 76% of decision-makers said they would prefer one service provider over another if a transparent, scalable SLA were available.
This highlights a clear chance for CSPs to make SLA development a higher priority. With rapid cloud adoption and growing reliance on outsourced and managed service models, the ability to accurately measure and report against mutually agreed SLAs is increasingly important.
When CSPs aim to demonstrate the value of new or enhanced services, SLAs offer a concrete, actionable commitment from the operator about the level of service customers can expect.
The research also revealed that 59% of respondents regard SLAs as especially important in times of financial scrutiny, when services are closely examined. SLAs provide customers with reassurance that agreed service levels exist and give them recourse if performance falls below those standards.
A notable concern is how SLAs are created: 60% of contracts were developed by the CSP rather than being jointly specified to match the customer’s unique needs.
It is critical that CSPs collaborate with customers when setting service levels. Long-term strategic partnerships are founded on trust, and well-constructed, mutually protective SLAs help to reinforce that trust.
Although new services and technologies put SLAs under greater scrutiny, they also create opportunities for CSPs to improve customer retention through value-added offerings and clearer commitments.
Billing is a central element of SLA effectiveness because it translates service quality into quantifiable charges. Enterprise managers will be hesitant to adopt policies such as bring-your-own-device (BYOD) if billing is opaque or requires significant effort to reconcile charges and identify errors—especially when policies change frequently.
CSPs can therefore add substantial value by providing easy-to-understand billing. Clear bills allow businesses to see how charges break down, which services drive costs, and how the CSP is performing against agreed SLAs.
With transparent billing and measurable SLAs, businesses can more effectively evaluate the value they receive from their communications provider and make informed decisions—whether to invest further in that provider or to consider alternative suppliers if service quality is lacking.
The challenge for CSPs is twofold: ensure that every element of service is robust enough to meet rising customer expectations, and make service performance measurable. SLAs with all contract partners must be actively monitored and partners held accountable for the quality of the elements they deliver.
Across the service delivery chain, integrating analytics and network monitoring tools enables dynamic service assurance controls that allow SLAs to be proactively managed—often meeting or even exceeding customer expectations.
The ad hoc, manual approach to customer management that was common in the past must become a central focus if service providers want to capitalize on the changing IT and telecoms environment. The SLA is, in essence, the critical tool customers require and the strategic offering CSPs must provide.