by Dan Smith, Managed Services Director at Retail Assist
It's sad but true. Many companies are short-changed by the service levels they receive from their Data Centre provider. The advice from Dan Smith in this article will help businesses gain true value from their Data Centre contracts and avoid common pitfalls.
The concept of 'value' is an interesting one. The Merriam Webster dictionary defines it as "a fair return or equivalent in goods, services, or money for something exchanged". Therefore, whilst cost is a factor in value, it is not the only consideration.
Over the years, I've spoken to numerous retailers who selected a Data Centre provider that initially appeared to provide good value for money. These retailers later found themselves out of pocket. Whilst quoted headline costs were low, additional hidden fees came along later.
When choosing a partner, it's important to consider the nature of relationship they are offering and the value that can be derived from it. The famous Oscar Wilde quote "A cynic is a man who knows the price of everything but the value of nothing" is relevant here. It is vital to establish the 'right relationship' with a supplier and select a Data Centre provider who understands your business, whether or not they are the company who quotes the lowest price.
With squeezed IT budgets a reality in most sectors, not least within the retail industry, it can be hard for IT Directors to justify not automatically buying into the apparently cheapest option. If their preferred supplier does not provide decision-makers with the lowest quotation, they may be forced to align potential costs with the impact that the different providers will have upon their operations, in order to make a decision.
Whilst many large Data Centres can offer economies of scale, the support provided is standard, regardless of the type of industry in which customers operate, be it local government or retail. Finding a provider who is a specialist within your chosen industry, however, can add significant value to the relationship. Such a provider will have both the required expertise and in-depth knowledge of the critical success factors of your business.
When selecting a partner, it's important to establish who will be the primary point of contact for service queries. Strong links between the parties need to be facilitated by a Client Services Manager and / or an Account Manager, who will act on your behalf to resolve any issues. Setting specific service level agreement (SLA) standards for server availability and problem 'fixes' in advance can also help ensure that both parties know precisely what is expected of them, so any confusion is minimised down the line.
Regardless of the size of budget you have allocated for Disaster Recovery, it is imperative to set aside a proportion for rehearsals. However sound your backup processes and the due diligence you conducted as part of your Business Continuity strategy, unexpected issues will inevitably emerge during rehearsals. You do not want to be unpleasantly surprised by any element of your Disaster Recovery procedure when you are faced with a real incident; so it's well worth going through this in advance.
Harvey Nichols entrusted their outsourced machine hosting to us in January 2005. This contract formed part of a programme of systems rationalisation following the retailer's investment in an IBM iSeries processor. We've been working together ever since and the Harvey Nichols' machine is located at Retail Assist's Northampton Data Centre where all elements of its housing, operations and support are managed. Rehearsals such as described above give the Harvey Nichols Board of Directors confidence in the smooth running of their operations.
Finding a trusted provider is worth the initial investment, as they will work with you over time to help you attain best practice and cost-savings within different areas of your business. Additionally, by proving that you have invested time in rehearsals and attesting to your preparedness, a Data Centre supplier may be able to influence a reduction in your insurance premiums; another means of adding value to your business in a perhaps unexpected way.
When returning to live systems operations following a Disaster Recovery procedure, the type of problem that retailers often face is that of finding that critical data such as sales figures has been duplicated. In today's multichannel world where sales information is utilised by the retailer's website, concessions and 'bricks and mortar' stores, and is fed between the different channels, this is a real issue. Incorrect data may result in misleading sales information. This can affect future buying and allocation decisions, which have a knock-on effect in lost sales via any of these routes to market, ultimately affecting the retailer's bottom line.
Suppliers have to take into account the high-performance, high-availability demands of modern retail. Due to the rise in internet shopping, e-commerce and m-commerce sales can occur at any time of the day or night. This means that outages taking place outside of traditional trading hours have more of an impact than they previously did.
Within the retail industry, downtime is simply no longer tolerated. The longer the duration of the outage, the less likely retailers are to be able to fulfil home delivery or 'click and collect' options within a pre-agreed time slot, ultimately leading to dissatisfaction amongst their customer base. As retailers know too well, a dissatisfied customer is a dangerous one, not only because they are less likely to purchase again but also because they may share their negative experience with friends and family, or via social networking platforms.
Order fulfilment is an area where we are seeing innovation. For example, our client Aurora Fashions now offers a 90-minute delivery option across all its brands, the Oasis, Coast and Warehouse chains. Soon consumers will become accustomed to this level of service and no longer see it as an exception. It is therefore incumbent upon retailers to ensure that their IT procedures, including those surrounding data hosting, match up to this expectation.
Data Centre staff are rarely thanked for maintaining consistent service levels. Instead, it's those employees who successfully 'fire fight' when things go wrong who enjoy the glory, or at least the pat on the back. This is all very well, but the best way to get out of trouble is not to get into it in the first place. Whilst this comment might be an unwelcome for a business whose critical systems were offline, it could perhaps prompt them to review the performance of their existing provider once the issue was resolved.
Finally, working with a Data Centre provider with relevant professional accreditations can bring benefits to your business. For example, the ISO20000 maxim of 'plan, do, check, act' helps organisations to learn from their successes as well as from their failures. No company wants to encounter failure but, with the right forward planning and the right 'valuable' partner, the ultimate risk to your business can be minimised.