Looking for cost savings in service-level management

Many network managers believe that more formalized service-level management (SLM) procedures will eventually reduce operating costs. Yet a recent study by Renaissance Worldwide and McConnell Consulting suggests that the road to operating cost reductions through SLM may not be easy. Let's explore why this is so.

In general, SLM initiatives usually target areas that are most impacted by network service quality. Furthermore, business performance is often measured in terms of quicker product or service time to market, increased product or service revenue, increased profit margins, or the opening of new product or service markets. Cost cutting alone cannot produce these results; service measurement along with subsequent service improvement is key. And that will generally cost more, not fewer, dollars.

So where can costs be reduced in this scenario? One key cost area to focus on may be support staff. Consider the cost associated with having a support person perform an overhead function (such as day-to-day help desk support) when that cost could be consumed by that same support person performing a more value-added function (such as implementing a service delivery extranet).

By investing in those products that support more automated setup and operational management of network service levels, the same support effort that would have been spent in operating these tools can be spent in more proactive support activities. Make sure your SLM product's capital cost is outweighed by the amount of freed-up support effort that results from more automated SLM operation. I'll explore how to do this with specific products in a future column.