By: Chris Skaggs | @chrislskaggs
Think back to the last time you bought a new TV. You were likely given the opportunity to purchase a service plan, also known as an extended warranty. The service plan the associate ever-so-delicately recommended you purchase was probably offered by the original equipment manufacturer (OEM). That extended warranty covered most service issues you might encounter during an initial time period.
Large enterprise IT purchases are no different. Many of the large IT manufacturers have service organizations and sell service plans as part of the initial purchase, as well as for the life of the equipment. Extended warranties provided by the OEM give the purchaser peace of mind, but they are also very expensive. Heavy portions of IT spending budgets are often dedicated to maintaining uptime through service plans.
Is third-party service the right choice for everyone? Probably not. OEM-provided service plans are a great option for new technology. When products are newly released, there are always kinks that have to be worked out, replacement parts are in short supply, and training opportunities can be limited to the OEM. As technology products mature, third-party service plans can become more appealing.
There are many items to consider when evaluating an OEM vs. a third-party service plan. While OEM maintenance is the norm for new purchases, is an OEM service plan the right choice for service beyond the initial agreement? What are the benefits to utilizing a third-party service plan? When making your pros and cons list, here are a few things to put in the pros column when considering third-party service:
A SINGLE POINT OF CONTACT
Rarely in today’s world does an organization have equipment from only one manufacturer. Each service contract will more than likely vary in terms of cost, duration and scope. With each contract, there are also different processes and administrative tasks to deal with. Who do you contact for this particular piece of equipment? Does this OEM have a four-hour response window or next business day? If you need to escalate and resolve an issue — how and with whom? Multiple service teams can also inevitably lead to finger pointing. Believe it or not, we’ve seen some pretty fascinating sabotage on the service side!
EXPANDED SCOPE AND EXPERIENCED TECHNICIANS
OEM-provided service plans are typically very narrow in scope, and those technicians can only touch a certain list of equipment. Alternatively, because of the amount of equipment third-party technicians are exposed to, they generally have extensive and relevant hands-on experience with a large variety of products. Third-party service technicians are also more well rounded and experienced than most OEM service technicians. Because of their extensive product knowledge, they understand integrations and how systems behave, which is a great value-add from a service provider.
OEMs invest significant amounts of money in research and development for the products they manufacture. By nature of their set-up, OEM service offerings are designed to help recoup some of those initial expenditures. Third-party service providers typically have all their money invested in their people and continual training. Being dedicated to service only, third party service providers don’t have to recoup R&D costs, and can save customers a significant amount of money with respect to their IT budget.
Third-party technicians are unbiased — they don’t care who makes the product, they just want to keep it running optimally. This vendor-agnostic mentally allows third-party technicians to uniquely provide recommendations on what is best for the customer, instead of what will sell more product. Third-party service providers have one singular focus — keep the customer up and running.
PARTS AVAILABILITY AND PROCUREMENT
Parts can be an integral part of the service experience. A successful third-party service model should establish parts depots in strategic locations, ensuring rapid availability. Because third-party service is ideal for more mature technology, procurement teams usually have deep knowledge of and access to many parts. As technology gets better and better, OEMs have little incentive to supply parts to their customers for more mature systems. Quite honestly, the OEM would more than likely rather sell the customer a new system.
A PASSION FOR SERVICE
Often times people will disregard or lessen a poor customer service experience because they ultimately like the product. Third-party service companies don't have that luxury. They have one product — their people, and the service those people deliver. Good third-party service companies are fanatical about service, and they should be!
The bottom line is that both OEM-provided service and third-party service are good solutions for maximizing performance and minimizing downtime. Each option comes with pros and cons, depending upon what kind of technology has been purchased, the age and maturity of the equipment, and the customer’s ultimate goal. Do your research and we’re confident you’ll select the service solution that works best for your business’ needs.