Warranty Blues

Warranty is the key to success for channels. Everyone is mouthing 'One year comprehensive on-site warranty', 'two years/three year warranty' and sometimes 'five year warranty' when marketing a computer system. So what is the real story behind all these fancy terminology?

Most people today are at sea when it comes to warranty. All they know is that almost every consumable commodity today comes with a tag saying that the warranty period of the product is for so and so period. But ask them how they plan to put that tag to good use and all you get is a blank stare.

Warranty is an assurance provided by a manufacturer to the user of that particular product. This assurance signifies that in case of any defects/problems during the mentioned warranty period, the manufacturer will rectify the problem without any additional charges being incurred by the user of the product. Well, this sure sounds like a piece of cake for any technical student who is ready to take his first lesson in product technicalities and maintenance!

However in today's IT scenario, it is not all that simple. In fact services provided by the manufacturer/vendor are a very crucial factor in procuring repeat business and ensuring smooth relations with the user of the product. With rapid growth of computerization across all industries and dependability on computers becoming a second nature for any organization, the services provided during the warranty period of a computer system determine the quality of business relationship between the user and the manufacturer.

Also, when we look at it from the computer dealer/channel partner's point of view it is equally important that the channel partner ensures that proper services are provided whenever needed during this warranty tenure.

In the late eighties and early nineties, with the segment of computer system manufacturers being limited to a few known names like Wipro, HCL, PCL, PCS, Zenith, ICIM and the local assemblers (or the gray market operators), warranty provision was simple. Around those times it was the one-year comprehensive onsite warranty that was doing the rounds. This meant that the supplier of the system was liable to rectify the problems in the system by either repairing the faulty component or replacing the entire system depending on the terms of sale. This was also a time when the IT market was more of PC oriented and the expansion towards networking was at a very nascent stage.

With the advent of multinational brands of PC's in India and rapid growth in computerization in the various core sectors, along with demand for high-end systems and software for various applications, the IT scenario underwent some significant changes. International IT giants like IBM, Compaq, Dell and others entered the Indian market, offering high quality computer systems with competitive prices and quality support. Then there was Dell who had revolutionized service standards in the US by providing technical tele-support on toll free lines which made it possible for the user to identify and rectify the problem all by himself with help of a technical specialist on the telephone. With the presence of these companies with their thrust for quality service provision, the definition of warranty underwent a dynamic change.

Slowly, the PC reseller/dealer segment also experienced these changes. Dealers who were earlier marketing Indian PC brands were more or less limited to just selling the systems and coordinating with principle/manufacturer in case of any problems.

These days most dealers for multinational brands offer extended warranties, three-year warranty in most of the cases. From the dealers point of view this three-year warranty is called a 'carry in' warranty. This means in case of any failures in the component/system, the principle/manufacturer will try to service the system either through the dealer or directly.

In case the component cannot be repaired at the customer’s location, the dealer will organize for 'carrying in' the faulty component/system to the principal/manufacturer's place for carrying out the necessary repairs/replacement. The component/system repair time (turnaround time) becomes very critical in such times.

When it comes to printers, the manufacturer usually provides a one-year 'carry-in' warranty. This is also the usual practice in the case for the other peripherals such as modems, routers etc.

It is important for a channel partner to clearly understand what kinds of warranties are being provided on various computer systems and peripherals.

Usually a one-year on-site comprehensive warranty is provided on a computer system. This means that in case of any failures in the system (including the monitor, CPU system and keyboard), the manufacturer/dealer agrees to rectify the problem at his cost by either rectifying the problem at the customer's place or carrying the defective part/entire system to his workshop. Usually the faulty component or system is replaced within a stipulated period.

It is very important for channels to ensure that either the technical person who is accountable to the channel’s client or some representative of the parent company keeps in touch with the client and keeps him informed regarding the status of the problem. This gesture will go a long way in ensuring that the client agrees on an annual maintenance contract (AMC) being awarded to the manufacturer/channel partner at the end of the warranty term.

Once the client is assured that the level of services provided by the channel partner are good, he can even think of providing a multiple year AMC which would work out to be quite beneficial to him and also to the manufacturer/dealer.

But for all this to come about, it is essential that the channel partner and the principal company are absolutely clear about the entire process of warranty. If there is any ambiguity between these two, there is absolutely no way, they will be able to satisfy the support needs of the end-customer.