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FUSION14 Session 302 | Optimizing the Tradeoff: Cost vs. Quality in IT Support

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The document discusses the optimization of cost versus quality in IT support, emphasizing the importance of benchmarking and key performance indicators (KPIs) to improve service desk performance. It outlines various KPIs that matter, along with the ideal ranges for cost per contact and customer satisfaction, while highlighting the significant impact of first contact resolution on overall satisfaction. The author encourages organizations to adopt best practices and fine-tune their processes to achieve an optimal balance in support operations.

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IT Support Services
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Optimizing the Tradeoff: Cost vs. Quality in IT Support Jeff Rumburg Managing Partner MetricNet, LLC
2 27 Years of IT Service and Support Benchmarking Data More than 3,000 IT Service and Support Benchmarks Global Database 70+ Key Performance Indicators More than 120 Industry Best Practices
3 10 Industry MegaTrends The rise of the Strategic Service and Support Organization Holistic use of KPI’s Benchmarking to Improve Performance User Self-Help Marketing Service and Support Understanding TCO and Shift Left Strategies First Contact and First Level Resolution Process Rationalization (ITIL, ITSM) Knowledge Management and Remote Diagnosis Service Optimization: Cost vs. Qualityin IT Support
4 Competing Objectives: Cost vs. Quality Doing Things Right…. Vs. Doing the Right Things! Lower Cost Higher Quality
Doing Things Right!
6 Some Common Service Desk KPI’s •Cost per Contact •First Level Resolution Rate Cost Productivity Service Level Quality Call Handling Agent •Average speed of answer (ASA) •Call abandonment rate •% Answered within 30 Seconds •Average hold time •Average time to abandon •Percent of calls blocked •Contacts per Agent per Month •Agent Utilization •Agents as % of Total FTE’s •Customer Satisfaction •Call Quality •% Escalated Level 1 Resolvable •Agent Occupancy •Annual Agent Turnover •Daily Absenteeism •New Agent Training Hours •Annual Agent Training Hours •Schedule Adherence •Agent Tenure •Agent Job Satisfaction •Contact Handle Time •First Contact Resolution Rate •User Self-Help Rate •IVR completion Rate •Percent of calls transferred And there are hundreds more!!
7 KPI’s: Which Ones Really Matter? •Cost per Contact Cost Productivity Quality Call Handling •Agent Utilization •Customer Satisfaction •First Contact Resolution Rate Agent •Agent Job Satisfaction Read MetricNet’s whitepaper on Service Desk Performance Metrics. Go to www.metricnet.comto get your copy! Aggregate •Balanced Scorecard TCO •First Level Resolution Rate
8 A Summary of the Major KPI Correlations Cost/Contact Customer Satisfaction Agent Utilization First Contact Resolution Agent Satisfaction Coaching Career Path Training Hours Call Quality HandleTime Agents/ Total FTE’s Absenteeism/ Turnover First Level Resolution Scheduling Efficiency Service Levels: ASA and AR
9 Cost (Cost/Contact) Quality (Customer Satisfaction) Higher Lower Higher BEST-IN-CLASS PERFORMANCE CURVE AVERAGE PERFORMANCECURVE The Cost vs. Quality Tradeoff
10 Another View: Cost vs. Quality Lower Cost Cost (Efficiency) Quality (Effectiveness) Top Quadrant Efficient andEffective Lower Quadrant Middle Quadrants Effective but notEfficient Middle Quadrants Efficient but notEffective Higher Cost Lower Quality Higher Quality n = 12 n = 24 n = 36 n = 25
11 Characteristics of a World-Class Service Desk •Service desk consistently exceeds customer expectations –Result is high levels of customer satisfaction –Call quality is consistently high •Costs are managed at or below industry average levels –Cost per contact below average –Minimizes Total Cost of Ownership (TCO) •Service desk follows industry best practices –Industry best practices are defined and documented –Service desk follows industry best practices •Every transaction adds value –A positive customer experience –Drives a positive view of IT overall
12 Higher Lower Higher A World-Class Service Desk An “Average” Service Desk BEST-IN-CLASS PERFORMANCE CURVE AVERAGE PERFORMANCE CURVE The World-Class Service Desk Defined Cost (Cost/Contact) Quality (Customer Satisfaction)
13 Cost (Cost/Contact) Quality (Customer Satisfaction) Higher Lower Higher Four Cost/Quality Scenarios 1. Lowest Cost, Lowest Quality 4. Highest Cost, Highest Quality 2. Lower Cost, Lower Quality 3. Higher Cost, Higher Quality
14 Key Performance Indicators: Four Scenarios Key Performance Indicators Four Scenarios Scenario 1(Lowest Cost/ Lowest Quality) Scenario 2(Lower Cost/ Lower Quality) Scenario 3(Higher Cost/ Higher Quality) Scenario 4(Highest Cost/ Highest Quality) Cost/Contact $9 $12 $18 $30 Customer Satisfaction 70% 82% 90% 95% Agent Utilization 65% 60% 55% 50% First Contact Resolution 60% 72% 78% 82% Average Speed of Answer 90 sec 60 sec 30 sec 20 sec First Level Resolution 75% 85% 90% 95%
15 Cost (Cost/Contact) Quality (Customer Satisfaction) Higher Lower Higher The Ideal Operating Range 1 2 3 4 Costs too High! (only rarely) Quality too Low! (only rarely) Ideal OperatingRange
16 KPI’s in The Ideal Operating Range Key Performance Indicators Performance in the Ideal Operating Range Scenario 2(Lower Cost/ Lower Quality) Scenario 3(Higher Cost/ Higher Quality) Cost/Contact $12 $18 Customer Satisfaction 82% 90% Agent Utilization 60% 55% First Contact Resolution 72% 78% Average Speed of Answer 60 sec 30 sec First Level Resolution 85% 90%
17 Optimizing the Cost/Quality Tradeoff Getting there is a Two-Step process 1.Benchmark your Service Deskto maximize Efficiency and Effectiveness 2.Fine Tune your Service Desk performance to achieve the ideal operating point
18 Your Service Desk Performance Performance of Benchmarking Peer Group Determine How Best in Class Achieve Superiority Adopt Selected Practices of Best in Class Build a Sustainable Competitive Advantage The ultimate objective of benchmarking COMPARE The Benchmarking Methodology
19 Cost/Contact Higher Lower Higher AFTER BENCHMARKING STARTING POINT: BEFORE BENCHMARKING BEST-IN-CLASS PERFORMANCE CURVE AVERAGE PERFORMANCE CURVE Step 1: Benchmarking
20 Cost (Cost/Contact) Quality (Customer Satisfaction) Higher Lower Higher Step 2: Fine Tuning Ideal OperatingRange Moving To Lower Cost Moving To Higher Quality
21 Moving to Higher Quality: Key Drivers Quality(Customer Satisfaction) First Contact Resolution(The Most Important Driver) Training Hours Call Quality Technology –Knowledge Base –Remote Diagnostic Tools The Bottom Line Every 1% Increase in First Contact Resolution Improves Customer Satisfaction by Approximately 1%! Agent Job Satisfaction
22 First Contact Resolution Drives Customer Satisfaction 20% 40% 60% 80% 100% 20% 40% 60% 80% 100% First Contact Resolution Customer Satisfaction
23 New Agent Training Hours vs. First Contact Resolution 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0 50 100 150 200 250 300 350 New Agent Training Hours First Contact Resolution Rate
24 Veteran Agent Training vs. First Contact Resolution 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0 20 40 60 80 100 120 140 Veteran Agent Training Hours First Contact Resolution Rate
25 25 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% Net First Level Resolution Remote Diagnostic Software No Remote Diagnostic Software The Effect of Remote Diagnostic Tools on FCR Average = 77.8% FCR Average = 61.4% FCR © 2013 MetricNet, LLC, www.metricnet.com First Contact Resolution Rate
26 26 The Effect of a Mature Knowledge Base on FCR © 2013 MetricNet, LLC, www.metricnet.com 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% 0 1 2 3 4 5 6 KBase Maturity FirNsett C Foirnstt aLcetv eRl eRseosloulutitoionn Rate
27 Cost (Cost/Contact) Quality (Customer Satisfaction) Higher Lower Higher Step 2: Fine Tuning Ideal OperatingRange Moving To Lower Cost Moving To Higher Quality
28 Moving to Lower Cost: Key Drivers The Bottom Line Every 2% Increase in Agent Utilization Reduces Cost per Contact by Approximately 1%! Cost(Cost/Contact) Agent Utilization(The Most Important Driver) Training Hours First Level Resolution Handle Time Service Levels: ASA and AR Scheduling Efficiency Technology Tools
29 Agent Utilization Drives Cost per Contact $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 20% 30% 40% 50% 60% 70% 80% Agent Utilization Cost per Contact
30 Agent Utilization Defined Agent Utilization is a measure of the actual time agents spend providing direct customer support in a month, divided by total time at work during the month It takes into account both inbound and outbound contacts handled by the Agents, and includes all contact types: voice, voice mail, email, web chat, walk-in, etc. But the calculation for Agent Utilization does not make adjustments for sick days, holidays, training time, project time, or idle time By calculating Agent Utilization in this way, all Service Desks worldwide are measured in exactly the same way, and can therefore be directly compared for benchmarking purposes Agent Utilization ((Average number of inbound Contacts handled by an Agent in a month) X (Average inbound handle time in minutes) + (Average number of outbound Contacts handled by an Agent in a month) X (Average outbound handle time in minutes)) (Average number of days worked in a month) X (Number of work hours in a day) X (60 minutes/hr) =
31 Example: Service Desk Agent Utilization Inbound Contacts per Agent per Month = 375 Outbound Contacts per Agent per Month = 225 Average Inbound Contact Handle Time = 10 minutes Average Outbound Contact Handle Time = 5 minutes Agent Utilization ((375 Inbound Contacts per Month) X (10 minutes) + (225 Outbound Contacts per Month) X (5 minutes) (21.5 working days per month) X (7.5 work hours per day) X (60 minutes/hr) = = 50.4% Agent Utilization Agent Utilization ((Average number of inbound Contacts handled by an Agent in a month) X (Average inbound handle time in minutes) + (Average number of outbound Contacts handled by an Agent in a month) X (Average outbound handle time in minutes)) (Average number of days worked in a month) X (Number of work hours in a day) X (60 minutes/hr) =
32 © 2014 MetricNet, LLC, www.metricnet.com 32 Agent Utilization: Benchmarking Results 26.0% 28.0% 30.0% 32.0% 34.0% 36.0% 38.0% 40.0% 42.0% 44.0% 46.0% 48.0% 50.0% 52.0% 54.0% 56.0% 58.0% 60.0% 62.0% 64.0% Agent Utilization High 63.3% Average ----- 45.4% Median 46.3% Low 30.0% Key Statistics Agent Utilization
33 ASA Drives Cost per Contact $0.00 $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 $35.00 $40.00 0 50 100 150 200 250 Average Speed of Answer (sec) Cost per Contact
34 ASA vs. Customer Satisfaction 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 0 5% 10% 15% 20% ASA as a % of Total Handle Time Customer Satisfaction
35 Call Abandonment Rate Also Drives Cost per Contact $0.00 $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 $35.00 $40.00 $45.00 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% Call Abandonment Rate Cost per Contact
36 Call Abandonment Rate vs. Customer Sat 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% Call Abandonment Rate Customer Satisfaction
37 Cost and Quality: Where Does Your Service Desk Land? Lower Cost Cost (Efficiency) Quality (Effectiveness) Top Quadrant Efficient andEffective Lower Quadrant Middle Quadrants Effective but notEfficient Middle Quadrants Efficient but notEffective Higher Cost Lower Quality Higher Quality n = 12 n = 24 n = 36 n = 25
Doing the Right Things!
39 The Paradox of IT Support  Less than 5% of all IT spending is allocated to end-user support  Service desk, desktop support, field support  This leads many to erroneously assume that there is little upside opportunity in IT support  The result is that most support organizations are managed with the goal of minimizing costs  But the most effective support strategies focus on maximizing value Corporate IT Spending Breakdown 4% 96%: Non support functions End-User Support  Application Development  Application Maintenance  Network Operations  Mainframe and midrange Computing  Desktop Computing  Contract Services (e.g., disaster recovery)
40 World-Class Service and support organizations recognize and exploit three unique sources of leverage: 1.Minimizing Total Cost of Ownership (TCO) 2.Improving End-User Productivity 3.Driving a Positive View of Corporate IT Creating Economic Value in Service and Support
41 Cost of First Level vs. n-Level Resolution Support Level Cost per Ticket Vendor Level 2: Desktop Support Field Support Level 3 IT(apps, networking, NOC, etc.) Level 1: Service Desk $471 $196 $85 $62 $22
42 Shift Left Cost Reduction Strategies
43 The Tao of SPOC (Single Point of Contact) User Community Level 1 Service Desk Desktop Support Field Support Level 2 IT Support Vendor Support
44 The Tao of SPOC (Continued) Key SPOC Principles Enterprise takes an end-to-end view of user support User/Customer has a single point of contact for all IT-related incidents, questions, problems, and work requests The Level 1 Service Desk is the SPOC Level 1 is responsible for: Ticket triage Resolution at Level 1 if possible Effective handoffs to n level support Resolution coordination and facilitation Ticket closure Desktop “Drive-bys”, “Fly-bys”, and “Snags” are strongly discouraged
45 SPOC Support Reduces Total Cost of Ownership 0% 5% 10% 15% 20% 25% 30% 35% 40% % Resolved Level 1 Capable % Resolved Level 1 Capable with SPOC% Resolved Level 1 Capable without SPOCAverage = 22.8% Average = 15.3%
46 Driving Contacts into Lower Cost Channels 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 6 Months1 Year2 Years3 Years5 YearsTime from Implementation % of All Contacts % Live Agent% Email% IVR% Web Chat% Web Self-Service
47 0 10 20 30 40 50 60 70 0 1 2 3 4 5 Productive Hours Lost per Employee per YearReturning Productivity to End Users 1 (top) 2 3 4 (bottom) Customer Satisfaction 93.5% 84.5% 76.1% 69.3% First Contact Resolution Rate 90.1% 83.0% 72.7% 66.4% Mean Time to Resolve (hours) 0.8 1.2 3.6 5.0 Customer Satisfaction 94.4% 89.2% 79.0% 71.7% First Contact Resolution Rate 89.3% 85.6% 80.9% 74.5% Mean Time to Resolve (hours) 2.9 4.8 9.4 12.3 Service Desk Desktop Support Performance Quartile Support Function Key Performance Indicator Average Productive Hours Lost per Employee per Year 17.1 25.9 37.4 46.9 Performance Quartile n = 60
48 84% 47% 31% 29% 22% 19% 8% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Service Desk Desktop Support Network Outages VPN Training Enterprise Applications Desktop Software Factors Contributing to IT Customer Satisfaction % Saying Very Important  n = 1,044  Global large cap companies  Survey type: multiple choice  3 responses allowed per survey  84% cited the service desk as a very important factor in their overall satisfaction with corporate IT  47% cited desktop support as a very important factor in their overall satisfaction with corporate IT Support Drives Customer Satisfaction for All of IT
49 Some Final Thoughts •Optimizing the Cost/Quality Tradeoff is a two-step process 1.Benchmark Service and Support to maximize Efficiency and Effectiveness 2.Fine Tune Service and Support performance to achieve the ideal operating point •Benchmarking will move your Service and Support to the Best-in-Class performance curve •From there, you can optimize cost and quality –Improve First Contact Resolution to improve Customer Satisfaction •Don’t “buy” too much Quality! –Improve Technician Utilization to reduce Cost per Contact •Don’t sacrifice quality for the sake of reducing costs!
Questions? Jeff Rumburg Managing Partner MetricNet, LLC
51 Thank you for attending this session. Don’t forget to complete an evaluation form! Optimizing the Tradeoff: Cost vs. Quality in IT Support Jeff Rumburg Managing Partner MetricNet, LLC

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FUSION14 Session 302 | Optimizing the Tradeoff: Cost vs. Quality in IT Support

  • 1. Optimizing the Tradeoff: Cost vs. Quality in IT Support Jeff Rumburg Managing Partner MetricNet, LLC
  • 2. 2 27 Years of IT Service and Support Benchmarking Data More than 3,000 IT Service and Support Benchmarks Global Database 70+ Key Performance Indicators More than 120 Industry Best Practices
  • 3. 3 10 Industry MegaTrends The rise of the Strategic Service and Support Organization Holistic use of KPI’s Benchmarking to Improve Performance User Self-Help Marketing Service and Support Understanding TCO and Shift Left Strategies First Contact and First Level Resolution Process Rationalization (ITIL, ITSM) Knowledge Management and Remote Diagnosis Service Optimization: Cost vs. Qualityin IT Support
  • 4. 4 Competing Objectives: Cost vs. Quality Doing Things Right…. Vs. Doing the Right Things! Lower Cost Higher Quality
  • 6. 6 Some Common Service Desk KPI’s •Cost per Contact •First Level Resolution Rate Cost Productivity Service Level Quality Call Handling Agent •Average speed of answer (ASA) •Call abandonment rate •% Answered within 30 Seconds •Average hold time •Average time to abandon •Percent of calls blocked •Contacts per Agent per Month •Agent Utilization •Agents as % of Total FTE’s •Customer Satisfaction •Call Quality •% Escalated Level 1 Resolvable •Agent Occupancy •Annual Agent Turnover •Daily Absenteeism •New Agent Training Hours •Annual Agent Training Hours •Schedule Adherence •Agent Tenure •Agent Job Satisfaction •Contact Handle Time •First Contact Resolution Rate •User Self-Help Rate •IVR completion Rate •Percent of calls transferred And there are hundreds more!!
  • 7. 7 KPI’s: Which Ones Really Matter? •Cost per Contact Cost Productivity Quality Call Handling •Agent Utilization •Customer Satisfaction •First Contact Resolution Rate Agent •Agent Job Satisfaction Read MetricNet’s whitepaper on Service Desk Performance Metrics. Go to www.metricnet.comto get your copy! Aggregate •Balanced Scorecard TCO •First Level Resolution Rate
  • 8. 8 A Summary of the Major KPI Correlations Cost/Contact Customer Satisfaction Agent Utilization First Contact Resolution Agent Satisfaction Coaching Career Path Training Hours Call Quality HandleTime Agents/ Total FTE’s Absenteeism/ Turnover First Level Resolution Scheduling Efficiency Service Levels: ASA and AR
  • 9. 9 Cost (Cost/Contact) Quality (Customer Satisfaction) Higher Lower Higher BEST-IN-CLASS PERFORMANCE CURVE AVERAGE PERFORMANCECURVE The Cost vs. Quality Tradeoff
  • 10. 10 Another View: Cost vs. Quality Lower Cost Cost (Efficiency) Quality (Effectiveness) Top Quadrant Efficient andEffective Lower Quadrant Middle Quadrants Effective but notEfficient Middle Quadrants Efficient but notEffective Higher Cost Lower Quality Higher Quality n = 12 n = 24 n = 36 n = 25
  • 11. 11 Characteristics of a World-Class Service Desk •Service desk consistently exceeds customer expectations –Result is high levels of customer satisfaction –Call quality is consistently high •Costs are managed at or below industry average levels –Cost per contact below average –Minimizes Total Cost of Ownership (TCO) •Service desk follows industry best practices –Industry best practices are defined and documented –Service desk follows industry best practices •Every transaction adds value –A positive customer experience –Drives a positive view of IT overall
  • 12. 12 Higher Lower Higher A World-Class Service Desk An “Average” Service Desk BEST-IN-CLASS PERFORMANCE CURVE AVERAGE PERFORMANCE CURVE The World-Class Service Desk Defined Cost (Cost/Contact) Quality (Customer Satisfaction)
  • 13. 13 Cost (Cost/Contact) Quality (Customer Satisfaction) Higher Lower Higher Four Cost/Quality Scenarios 1. Lowest Cost, Lowest Quality 4. Highest Cost, Highest Quality 2. Lower Cost, Lower Quality 3. Higher Cost, Higher Quality
  • 14. 14 Key Performance Indicators: Four Scenarios Key Performance Indicators Four Scenarios Scenario 1(Lowest Cost/ Lowest Quality) Scenario 2(Lower Cost/ Lower Quality) Scenario 3(Higher Cost/ Higher Quality) Scenario 4(Highest Cost/ Highest Quality) Cost/Contact $9 $12 $18 $30 Customer Satisfaction 70% 82% 90% 95% Agent Utilization 65% 60% 55% 50% First Contact Resolution 60% 72% 78% 82% Average Speed of Answer 90 sec 60 sec 30 sec 20 sec First Level Resolution 75% 85% 90% 95%
  • 15. 15 Cost (Cost/Contact) Quality (Customer Satisfaction) Higher Lower Higher The Ideal Operating Range 1 2 3 4 Costs too High! (only rarely) Quality too Low! (only rarely) Ideal OperatingRange
  • 16. 16 KPI’s in The Ideal Operating Range Key Performance Indicators Performance in the Ideal Operating Range Scenario 2(Lower Cost/ Lower Quality) Scenario 3(Higher Cost/ Higher Quality) Cost/Contact $12 $18 Customer Satisfaction 82% 90% Agent Utilization 60% 55% First Contact Resolution 72% 78% Average Speed of Answer 60 sec 30 sec First Level Resolution 85% 90%
  • 17. 17 Optimizing the Cost/Quality Tradeoff Getting there is a Two-Step process 1.Benchmark your Service Deskto maximize Efficiency and Effectiveness 2.Fine Tune your Service Desk performance to achieve the ideal operating point
  • 18. 18 Your Service Desk Performance Performance of Benchmarking Peer Group Determine How Best in Class Achieve Superiority Adopt Selected Practices of Best in Class Build a Sustainable Competitive Advantage The ultimate objective of benchmarking COMPARE The Benchmarking Methodology
  • 19. 19 Cost/Contact Higher Lower Higher AFTER BENCHMARKING STARTING POINT: BEFORE BENCHMARKING BEST-IN-CLASS PERFORMANCE CURVE AVERAGE PERFORMANCE CURVE Step 1: Benchmarking
  • 20. 20 Cost (Cost/Contact) Quality (Customer Satisfaction) Higher Lower Higher Step 2: Fine Tuning Ideal OperatingRange Moving To Lower Cost Moving To Higher Quality
  • 21. 21 Moving to Higher Quality: Key Drivers Quality(Customer Satisfaction) First Contact Resolution(The Most Important Driver) Training Hours Call Quality Technology –Knowledge Base –Remote Diagnostic Tools The Bottom Line Every 1% Increase in First Contact Resolution Improves Customer Satisfaction by Approximately 1%! Agent Job Satisfaction
  • 22. 22 First Contact Resolution Drives Customer Satisfaction 20% 40% 60% 80% 100% 20% 40% 60% 80% 100% First Contact Resolution Customer Satisfaction
  • 23. 23 New Agent Training Hours vs. First Contact Resolution 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0 50 100 150 200 250 300 350 New Agent Training Hours First Contact Resolution Rate
  • 24. 24 Veteran Agent Training vs. First Contact Resolution 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0 20 40 60 80 100 120 140 Veteran Agent Training Hours First Contact Resolution Rate
  • 25. 25 25 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% Net First Level Resolution Remote Diagnostic Software No Remote Diagnostic Software The Effect of Remote Diagnostic Tools on FCR Average = 77.8% FCR Average = 61.4% FCR © 2013 MetricNet, LLC, www.metricnet.com First Contact Resolution Rate
  • 26. 26 26 The Effect of a Mature Knowledge Base on FCR © 2013 MetricNet, LLC, www.metricnet.com 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% 0 1 2 3 4 5 6 KBase Maturity FirNsett C Foirnstt aLcetv eRl eRseosloulutitoionn Rate
  • 27. 27 Cost (Cost/Contact) Quality (Customer Satisfaction) Higher Lower Higher Step 2: Fine Tuning Ideal OperatingRange Moving To Lower Cost Moving To Higher Quality
  • 28. 28 Moving to Lower Cost: Key Drivers The Bottom Line Every 2% Increase in Agent Utilization Reduces Cost per Contact by Approximately 1%! Cost(Cost/Contact) Agent Utilization(The Most Important Driver) Training Hours First Level Resolution Handle Time Service Levels: ASA and AR Scheduling Efficiency Technology Tools
  • 29. 29 Agent Utilization Drives Cost per Contact $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 20% 30% 40% 50% 60% 70% 80% Agent Utilization Cost per Contact
  • 30. 30 Agent Utilization Defined Agent Utilization is a measure of the actual time agents spend providing direct customer support in a month, divided by total time at work during the month It takes into account both inbound and outbound contacts handled by the Agents, and includes all contact types: voice, voice mail, email, web chat, walk-in, etc. But the calculation for Agent Utilization does not make adjustments for sick days, holidays, training time, project time, or idle time By calculating Agent Utilization in this way, all Service Desks worldwide are measured in exactly the same way, and can therefore be directly compared for benchmarking purposes Agent Utilization ((Average number of inbound Contacts handled by an Agent in a month) X (Average inbound handle time in minutes) + (Average number of outbound Contacts handled by an Agent in a month) X (Average outbound handle time in minutes)) (Average number of days worked in a month) X (Number of work hours in a day) X (60 minutes/hr) =
  • 31. 31 Example: Service Desk Agent Utilization Inbound Contacts per Agent per Month = 375 Outbound Contacts per Agent per Month = 225 Average Inbound Contact Handle Time = 10 minutes Average Outbound Contact Handle Time = 5 minutes Agent Utilization ((375 Inbound Contacts per Month) X (10 minutes) + (225 Outbound Contacts per Month) X (5 minutes) (21.5 working days per month) X (7.5 work hours per day) X (60 minutes/hr) = = 50.4% Agent Utilization Agent Utilization ((Average number of inbound Contacts handled by an Agent in a month) X (Average inbound handle time in minutes) + (Average number of outbound Contacts handled by an Agent in a month) X (Average outbound handle time in minutes)) (Average number of days worked in a month) X (Number of work hours in a day) X (60 minutes/hr) =
  • 32. 32 © 2014 MetricNet, LLC, www.metricnet.com 32 Agent Utilization: Benchmarking Results 26.0% 28.0% 30.0% 32.0% 34.0% 36.0% 38.0% 40.0% 42.0% 44.0% 46.0% 48.0% 50.0% 52.0% 54.0% 56.0% 58.0% 60.0% 62.0% 64.0% Agent Utilization High 63.3% Average ----- 45.4% Median 46.3% Low 30.0% Key Statistics Agent Utilization
  • 33. 33 ASA Drives Cost per Contact $0.00 $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 $35.00 $40.00 0 50 100 150 200 250 Average Speed of Answer (sec) Cost per Contact
  • 34. 34 ASA vs. Customer Satisfaction 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 0 5% 10% 15% 20% ASA as a % of Total Handle Time Customer Satisfaction
  • 35. 35 Call Abandonment Rate Also Drives Cost per Contact $0.00 $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 $35.00 $40.00 $45.00 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% Call Abandonment Rate Cost per Contact
  • 36. 36 Call Abandonment Rate vs. Customer Sat 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% Call Abandonment Rate Customer Satisfaction
  • 37. 37 Cost and Quality: Where Does Your Service Desk Land? Lower Cost Cost (Efficiency) Quality (Effectiveness) Top Quadrant Efficient andEffective Lower Quadrant Middle Quadrants Effective but notEfficient Middle Quadrants Efficient but notEffective Higher Cost Lower Quality Higher Quality n = 12 n = 24 n = 36 n = 25
  • 38. Doing the Right Things!
  • 39. 39 The Paradox of IT Support  Less than 5% of all IT spending is allocated to end-user support  Service desk, desktop support, field support  This leads many to erroneously assume that there is little upside opportunity in IT support  The result is that most support organizations are managed with the goal of minimizing costs  But the most effective support strategies focus on maximizing value Corporate IT Spending Breakdown 4% 96%: Non support functions End-User Support  Application Development  Application Maintenance  Network Operations  Mainframe and midrange Computing  Desktop Computing  Contract Services (e.g., disaster recovery)
  • 40. 40 World-Class Service and support organizations recognize and exploit three unique sources of leverage: 1.Minimizing Total Cost of Ownership (TCO) 2.Improving End-User Productivity 3.Driving a Positive View of Corporate IT Creating Economic Value in Service and Support
  • 41. 41 Cost of First Level vs. n-Level Resolution Support Level Cost per Ticket Vendor Level 2: Desktop Support Field Support Level 3 IT(apps, networking, NOC, etc.) Level 1: Service Desk $471 $196 $85 $62 $22
  • 42. 42 Shift Left Cost Reduction Strategies
  • 43. 43 The Tao of SPOC (Single Point of Contact) User Community Level 1 Service Desk Desktop Support Field Support Level 2 IT Support Vendor Support
  • 44. 44 The Tao of SPOC (Continued) Key SPOC Principles Enterprise takes an end-to-end view of user support User/Customer has a single point of contact for all IT-related incidents, questions, problems, and work requests The Level 1 Service Desk is the SPOC Level 1 is responsible for: Ticket triage Resolution at Level 1 if possible Effective handoffs to n level support Resolution coordination and facilitation Ticket closure Desktop “Drive-bys”, “Fly-bys”, and “Snags” are strongly discouraged
  • 45. 45 SPOC Support Reduces Total Cost of Ownership 0% 5% 10% 15% 20% 25% 30% 35% 40% % Resolved Level 1 Capable % Resolved Level 1 Capable with SPOC% Resolved Level 1 Capable without SPOCAverage = 22.8% Average = 15.3%
  • 46. 46 Driving Contacts into Lower Cost Channels 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 6 Months1 Year2 Years3 Years5 YearsTime from Implementation % of All Contacts % Live Agent% Email% IVR% Web Chat% Web Self-Service
  • 47. 47 0 10 20 30 40 50 60 70 0 1 2 3 4 5 Productive Hours Lost per Employee per YearReturning Productivity to End Users 1 (top) 2 3 4 (bottom) Customer Satisfaction 93.5% 84.5% 76.1% 69.3% First Contact Resolution Rate 90.1% 83.0% 72.7% 66.4% Mean Time to Resolve (hours) 0.8 1.2 3.6 5.0 Customer Satisfaction 94.4% 89.2% 79.0% 71.7% First Contact Resolution Rate 89.3% 85.6% 80.9% 74.5% Mean Time to Resolve (hours) 2.9 4.8 9.4 12.3 Service Desk Desktop Support Performance Quartile Support Function Key Performance Indicator Average Productive Hours Lost per Employee per Year 17.1 25.9 37.4 46.9 Performance Quartile n = 60
  • 48. 48 84% 47% 31% 29% 22% 19% 8% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Service Desk Desktop Support Network Outages VPN Training Enterprise Applications Desktop Software Factors Contributing to IT Customer Satisfaction % Saying Very Important  n = 1,044  Global large cap companies  Survey type: multiple choice  3 responses allowed per survey  84% cited the service desk as a very important factor in their overall satisfaction with corporate IT  47% cited desktop support as a very important factor in their overall satisfaction with corporate IT Support Drives Customer Satisfaction for All of IT
  • 49. 49 Some Final Thoughts •Optimizing the Cost/Quality Tradeoff is a two-step process 1.Benchmark Service and Support to maximize Efficiency and Effectiveness 2.Fine Tune Service and Support performance to achieve the ideal operating point •Benchmarking will move your Service and Support to the Best-in-Class performance curve •From there, you can optimize cost and quality –Improve First Contact Resolution to improve Customer Satisfaction •Don’t “buy” too much Quality! –Improve Technician Utilization to reduce Cost per Contact •Don’t sacrifice quality for the sake of reducing costs!
  • 50. Questions? Jeff Rumburg Managing Partner MetricNet, LLC
  • 51. 51 Thank you for attending this session. Don’t forget to complete an evaluation form! Optimizing the Tradeoff: Cost vs. Quality in IT Support Jeff Rumburg Managing Partner MetricNet, LLC