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AV and videoconferencing service:
Flexibility key to designing service agreements

Opportunity cost or cost of ownership? How you look at downtime is a crucial factor in the type of service agreement that makes sense for your organization.

“Every customer is different,” explains Joe Moon from Conference Technologies Inc.® Peoria office  “So offering a standard, one-size-fits-all service plan is not the way to try to help our clients.”

Moon says that his corporate customers tend to look at return on investment when they consider maintenance and service, and thus they see any downtime as an opportunity cost – a lost opportunity to make money by using their investment in a meeting room or classroom.

Publicly funded organizations, such as universities, tend to look at total cost of ownership. They realize their systems must be maintained to continue functioning, and they don’t want to have to cancel classes, but nonetheless a smaller number goes into the cost equation because it’s not appropriate to factor in lost revenues.

 “For that reason my corporate customers are more likely to choose an all-inclusive, all-risk type of agreement,” Moon says, “while universities tend to buy blocks of labor hours with a guaranteed response time.”

Another factor that goes into the equation is the sophistication of the client's staff. Businesses with large AV staffs are apt to buy blocks of hours, so they can get our most technical staff as needed at a reduced rate. Clients with a smaller staff or no staff –whether at universities, government facilities or businesses– tend to buy more comprehensive agreements, so they can be assured that their systems work reliably with minimal input on their part.

 Individualized agreements

“We try to be very flexible in writing these agreements,” says Moon, “and we can customize almost any aspect to a given client.”

An all-inclusive agreement, such as CTI’s Platinum Agreement covers everything. The provider promises to make two periodic preventative maintenance calls (5 and 10 months after starting or renewing service agreement), respond to any emergency calls within a set timeframe, and absorb all the costs of parts, labor and loaner equipment. The only items not covered are consumables such as batteries and lamps.

CTI also offers a Gold Agreement, which covers any labor issue but does not cover the cost of parts or failed components, however a 15% discount on parts is included. This type of agreement covers programming issues, additional training (if there’s an operator-error issue), and the cost of technician time and transportation.

In a block-of-hours agreement, the customer pays for any out-of-warranty parts or components, but contracts for a set number of labor hours at a reduced rate. In some of these agreements, the client pays for blocks of labor hours in advance; in others he or she agrees to use a set number of hours per year and CTI bills on a monthly basis.

“At one of our University contracts, for example,” Moon explains, “issues a standing purchase order for labor that covers maintenance and repairs plus engineering, programming and installation of new AV systems across campus.” While the PO specifies a given number of labor hours per year, the University has complete flexibility in how those hours are used. “The agreement is large enough that we base a technician nearby, who can respond very quickly in any emergency,” Moon says, “though we also pull in people from Peoria and our other offices for scheduled work.” 

The University has its own AV staff, which is very capable of doing this type of work. “The expectations on campus, however, keep rising and they have decided to outsource much of the work to people they trust.” Outsourcing to a firm like CTI can make a lot of sense. It’s very difficult for a group of people whose primary expertise is in another field –whether that’s education, banking, medicine or even IT management– to service complex AV systems as efficiently or economically as Conference Technologies.

Varied needs

Many clients opt for a response time that guarantees a returned phone call within an hour and a technician on site within 24, but others require a technician on site within two hours of the call. The cost, of course, varies with the requirements, but it’s also affected by the type, complexity and age of the AV system covered. “We’re installing more and more systems with networked controls,” explains Moon. “In that case our technicians can diagnose and very often solve any problem without the delay of traveling to the customer’s site.” CTI routinely writes agreements for older systems that we may or may not have installed, and these do tend to need more service than brand new systems.

CTI agreements often cover more than repairs and maintenance. “We have an agreement with Carle Foundation Hospital,” says Moon, “that includes training for new hires. They know that periodically they will have new people on board who need to understand how to operate their systems. So our agreement stipulates that we will return, from time to time, to offer training and bring everyone up to speed.”

In a block-of-hours type agreement, the customer is free to use his or her hours in any way that makes sense. We’ve had more than one, for example, ask us to cover for sick or vacationing employees during a big presentation.

 “Our job is to help our customers use their AV and videoconferencing systems in any way we can,” says Moon. “If they have a need and we have the expertise, we will help them.”

Conference Technologies Inc.®  ~   Creating A Vision For Technology