By Xavier Surentherathas, Business Development Director, SSCS APAC
Now that 71% of the world’s largest companies are using Third Party Maintenance for post-warranty servers, storage and networking hardware, the Third Party Hardware Maintenance industry is becoming a popular method to effectively contain IT costs and reduce operating expense. Instead of competing with OEMs and offering savings of 50-60%, in many new opportunities Third Party Maintainers (TPMs) are competing against one another.
Mostly, this is a good thing for IT procurement and data center management. But, sometimes it could be a bad thing. Some companies will continue to be price-focused and attempt to get the best deal among a few TPM provider options. Lean pricing might often be made leaner, but there is a point when one of these TPM vendors will sacrifice something to win the business. This enabled “race to the bottom” increases your risk and you’re not likely to be satisfied with your provider when choosing solely on price.
Now that I compete against other TPMs, my contacts will complain that my pricing is higher than others. I advise and caution them that other TPMs will dilute their back-up parts (and logistics) plan to further lower their pricing. Doing so significantly increases the risk of missed SLAs! I continue to explain that my company won’t take risks that are unacceptable or unknown to the client. I try to help them understand that enabling serves no one. Regardless of my explanations, these buyers kept their eyes focused on the ‘pot of gold’ they are about to save and follow the rainbow described to them by a competitor. The business is too often awarded to the lowest price provider.
In my opinion, transparency and integrity should NEVER be sacrificed to win business. Yet, Service Quality is often being sacrificed by our competition to provide the lowest pricing.
In more examples than I can mention, these buyers that have chased the ‘pot of gold’ come back to me in 5-10 months and tell horror stories about missed SLAs, including critical parts not kept nearby. They describe a miserable experience and explain that my advice was indeed accurate and fair. I’m not proud of being right. Instead, I’m disheartened by them having been misled and all the added costs associated with their dissatisfaction. It simply shouldn’t happen.
I suggest caution when TPMs proclaim they have the “best-service/value-for-the-price” and offer nothing to back-up such claims. Instead of blindly believing, ask for client references that are located near to your facilities. You’ll want to hear directly from existing clients to learn whether there were surprises during incidents, or whether they believe they’re getting good value for the service. Be sure to ask several questions that help you gather an understanding of their vendor’s transparency and integrity.
Rainbows are real, there are wonderful Third-Party Maintainers in the global marketplace. But, your standards for Service Quality should not be dismissed by any vendor, especially when they aren’t transparent about the increased risk while you’re wishing to further drive down costs. My best suggestion? Look to your independent hardware support vendors for great pricing but choose your provider based upon the transparency and integrity they demonstrate.
Xavier Surentherathas, Business Development Director, SSCS APAC
Xavier joined SSCS in 2014, bringing account development experience from Rentwise Sdn Bhd, Peremex Sdn Bhd and Basis Bay – approximately 14 years in IT, consultative sales and account management. Currently, he leads the APAC sales and sales support teams, but also sells directly and provides account management for key clients. A resident of Selangor, Malaysia, Xavier earned his degree (MBA distinction) from IPE Management School – Paris. At this time, Xavier is also pursuing his PhD in Business Management. In addition to devoting time to his wife and young children, Xavier has interests in music, movies, reading, international travel and health/fitness.