Businesses evolve through organic growth, mergers and acquisitions. Each business that is acquired obviously has an existing data center with unique applications and hardware. Additionally, companies over the past two decades have acquired new technology either to gain a competitive advantage or to reap the benefits of improved applications and products. One result of this evolution of businesses is data centers comprised of hardware from multiple vendors.
Adding to the complexity of data centers is that each vendor usually has different warranty periods, expiration dates and service level agreements (SLAs).
Smart Business spoke with Ted Rieple, executive vice president of Business Development at Park Place International, to learn more about the issues corporations face in managing service contracts for their data center equipment.
What is the environment for corporate IT operations today?
Businesses of all sizes and in every industry are facing unprecedented challenges. They need to reduce costs and deliver increased value to win new customers and to keep their existing customers. Information technology budgets, in particular, have been the target of cost-cutting initiatives.
What these IT departments need are options to improve their operations and reduce costs without sacrificing quality. Ultimately, this economy will rebound, and businesses will want to have that head count available to them for the important projects on the horizon.
What are some of the issues your customers face in managing IT service contracts?
The average Global 1000 corporation maintains more than 40,000 active contracts and this number is growing every day. Most of these contracts are still managed in a traditional manual methodology. These global corporations face numerous issues:
- Lack of visibility into legal and financial risk — ‘file and forget’
- Un-auditable paper trail
- Deficient or no proper approvals chain
- Lost profit or revenue opportunities
These same issues apply to the maintenance service contracts for data center hardware. In particular, there is complexity caused by:
- Different vendors’ SLAs
- Warranty expirations
- Over-payment due to lack of flexibility in terms and conditions
Customers need to be able to meet contractual obligations, manage customer and supplier performance against contract terms and language and continually improve operations.
