Know when to hold 'em and when to fold 'em - Industry Trend or Event

Communications News, August, 1999 by James Careless

Managing--and surviving--your service provider.

Isn't it wonderful that there are so many service providers to choose from today? Well, isn't it? Not necessarily. In fact, the explosion of competitive service providers--and the uneven levels of service they offer--can often be a pain. As a result, CIOs and network managers are increasingly making their operating motto "Let the buyer beware." That's because there are so many service providers out there promising the moon, it's easy to get burned.

Lis Angus knows this too well. As executive vice president of Angus Telemanagement, a Toronto telecom consulting group, she's seen all kinds of service providers rise and fall, often at their clients' expense. Angus has built up a store of good advice on managing relationships with service providers, which she's fortunately willing to share.

The secret? To stay on top of service providers, you need to know your company's existing telecommunications infrastructure cold. Angus says, "Knowing what you have now should include not just what wires you have [going] into your building, but what services are you paying for--do you have volume discounts? What prices are you paying? And what capabilities does it all give you?"

Next, you have to look ahead to project your company's needs as accurately as possible. Put these together, and you'll be better prepared not only to manage your existing service providers but to shop around for better deals as well. That's because a well-informed CIO is equipped to compare "apples to apples" when considering different service providers.

"That's actually the hard part of managing service providers," she says. "Typically, you'd get a proposal from one that might have some litTLe advantage or disadvantage in it that might not be exacTLy the same as somebody else's." Unless you know your facts, you might not catch this, or--worse yet--get seduced into a service agreement that really doesn't meet your company's needs at all.

"The key is to be an intelligent shopper," says Angus. But that's not all. Once you know what you want, it's up to you to demand it from service providers. "Don't let them set the agenda for what information to give you," she says. "You set the agenda for them as to what information you need to have in order to make your decision."

One network manager who understands Angus' advice--and probably knows more about managing service providers than he wants to--is Scott Kleinknecht, co-owner of Protocol Communications LLC, a telemarketing company based in Laurel, Md. Leaning more toward the technical side of the market, Protocol telemarkets for Lucent Technologies, Sprint, and a number of Internet companies.

Obviously, Protocol's existence rises and falls with its service providers. If the situation isn't managed right, 200 people could be out of their jobs. That's why the company has spread out its risk by using a combination of service providers, namely Net2000 Communications, ATX, and Bell ATLantic. As Kleinknecht says, "You need redundancy when you're a telemarketer."

Of course, most of the time all three service providers are up and running. When this is the case, "I basically use the one with the best deal," he says, particularly for long distance. "A penny a minute to us means a lot to the bottom line."

How does Protocol make sure it's getting the best prices? "It's pretty easy," answers Kleinknecht. "I've got people [from other service providers] calling me all day, saying what the rates are." Armed with this information, he goes back to his service providers and asks for a better service agreement. "Quite often, they just renegotiate it the same day."

However, keeping his service providers affordable isn't Kleinknecht's only challenge. He also has to scrutinize their invoices carefully to make sure that he isn't being overcharged. There's also the problem of service and support when things go wrong. Protocol wants and needs help immediately.

Kleinknecht is happy with his current service providers: they' re there when he calls them. That wasn't the case with a former service provider, despite the fact that this company's support department was in the same building. "I could never get somebody to come in to give me customer service," says Kleinknecht. For instance, when Protocol's TL lines were down, this provider not only denied it but refused to bring in equipment to check!

Kleinknecht's moral? When it comes to managing his service providers, "I don't put my eggs into one basket." That's why the support problems Protocol experienced never affected the company's overall performance. In fact, when that one service provider was not performing, Kleinknecht simply routed his calls through another.

All of Kleinknecht's clever coping begs a big question: Why is the service provision market so wild and woolly? Why does he have to do these things in order to protect his company?

One reason is that competitive service provision is still relatively new. This means the worst players have yet to be shaken out of the market, for now leaving CIOs and network managers vulnerable to them.