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Problem 4. Quality of Service Change Requests Difficult to Implement
Company X agreed to provide the outsourcer sixty days to implement service level change requests from the time they were received. However, in an obscure part of the contract it stated that non-MPLS circuits were not included and they could require additional time based on a "best-effort" upgrade to MPLS.
Problem Resolution
This situation created delays in the rollout of a bar code scanning application that required class of service to support data and slow-scan video. This problem could have been avoided if MPLS was as pervasive as Company X was lead to believe. However, the outsourcer did upgrade all FR circuits to MPLS faster than originally stated, but the delay did impact Company X's business application release plans adding more strain to an already strained relationship.
Problem 5. Software Upgrades Took Too Long
Router software upgrades were not completed in the time frame agreed to contractually. This created configuration and performance management issues that should have been avoided. The outsourcer claimed all software revisions had to be fully tested first to verify they met their standards before releasing them into an operational environment. This statement was corroborated in the contract's terms and conditions, but there was no stated timeframe, other than best effort, to accomplish the upgrade.
Problem Resolution
Because the router software in question was released by Cisco for over ninety days, Company X was able to leverage this point to get the updates installed in an expedited manner. However, Company X wasted valuable time to negotiate this upgrade that could have been better used elsewhere. The outsourcer gave into the pressure from Company X and the software upgrade was completed in an acceptable timeframe.
Key Considerations
Based on their experiences, Company X believes the following points should be considered by those companies considering network outsourcing.
1. Large outsourcers are more difficult to deal with. Company X believes large outsourcers inherently have more red tape and bureaucracy hurdles to overcome. While this may or may not ring true, Company X's problem escalation policy did require them to jump through many time-based hoops to expedite problems. Getting to the right person for prompt problem resolution was difficult at best.
2. Verify there is a separate SLA. In Company X's case, the SLA terms were hidden in different parts of the contract which made it difficult to locate and interpret them. If the terms and conditions would have been contained in a centralized document, Company X believes they could have identified problem areas during their contract review.
3. Consider outsourcer compensation for network equipment. Although the outsourcer purchased the network equipment, the payment was less than Company X's book value. Company X realized they were culpable and should have identified this problem during contract negotiations and taken action to resolve it. In retrospect, Company X would have preferred to retain ownership of their network equipment because of the financial accounting benefits.
Next: How to Avoid Outsourcing Pitfalls
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