Free Desktop Support Training Series | Cost vs. Quality in IT Support | MetricNet Certified

Striking the Right Balance:
Cost vs. Quality in IT Support

1© MetricNet, LLC, www.metricnet.com
20 Years of Help Desk Data
More than 1,300 Help Desk Benchmarks
Global Database
30 Key Performance Indicators
Nearly 80 Industry Best Practices

Then and Now: 20 Years of Benchmarking Metrics
Key Performance
Indicator
Industry Average Performance
1988 2008
Monthly Contacts per
End-User
0.79 1.81
Cost per Contact $9.57 $21.52
Average Handle Time 6:27 12:20
Resolved on First
Contact
35% 68%
Resolved at Level 1 39% 84%
Starting Agent Salaries
(2008 dollars)
$27,280 $36,340
Help Desk Cost per
End-User per Year
$97 $574

The 20 Year Trend in Help Desk Budgets
Help Desk budgets have grown from 0.7% to 4.3% of corporate IT spending over the last 20 years.
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
HelpDeskBudgetasa%ofTotalITSpend
1988 1996 2000 2004 20081992
0.7%
1.4%
1.8%
3.3%
4.0% 4.3%
A 6 Fold Increase in Help Desk Budgets!

 Newer help desks and
less evolved help desks
are in this category
 Help desks in this stage
are unable to anticipate
or prepare for problems
 A reactive “fire-fighting”
mentality prevails at this
stage
 Call volume continually
increases at this stage
 Customer satisfaction is
the goal
 The primary goal of a
strategic help desk is to make
end users more productive
 Help desk anticipates
problems and takes action to
prevent occurrence
 A proactive mentality prevails
 Users are given tools to solve
their own problems
 Call volume sometimes
declines at this stage
 Problem complexity increases
 Customer enthusiasm
and value creation is the
goal!
 Heavy investments in
training and technology
characterize this stage
 An expert network of
problem solvers is
established outside the
help desk
 Automation begins
 ACD, VRU, report
generation, etc.
 Knowledge base
established
 Call volume oftentimes
levels off
Support Stage Transitional Stage Strategic Stage
The Help Desk Evolution

61%
31%
8%
Support Stage Transitional Stage Strategic Stage
Traditional customer
support paradigm
The help desk makes a shift
from following the customer to
leading the customer
The help desk operates in a
non-traditional customer
support paradigm – every
transaction adds value!
How Far Has Your Help Desk Evolved?

Three of the Most Important Industry MegaTrends
1. The Holistic Use of KPI’s: The Hidden Value of
KPI Correlations
 Yesterday
2. Striking the Right Balance: Cost vs. Quality in IT
Support
 This Session!
3. Image Management: Successfully Marketing Your
Help Desk
 Today at 2:45 pm

Cost (Cost/Contact)
Quality(CustomerSatisfaction)
HigherLower
Higher
BEST-IN-CLASS
PERFORMANCE CURVE
AVERAGE
PERFORMANCE CURVE
The Cost vs. Quality Tradeoff

Characteristics of a World-Class Help Desk
 Help 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
 First Level Resolution is high (minimizes TCO)
 Every transaction adds value
 A positive customer experience
 Drives a positive view of IT overall

Cost (Cost/Contact)
HigherLower
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

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%

Cost (Cost/Contact)
HigherLower
Higher
The Ideal Operating Range
1
2
3
4
Costs too High!
(only rarely)
Quality too Low!
(only rarely)
Ideal Operating
Range

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%

Optimizing the Cost/Quality Tradeoff
Getting there is a Two-Step process
1. Benchmark your Help Desk
to maximize Efficiency and Effectiveness
2. Fine Tune your Help Desk performance to
achieve the ideal operating point

Your Help 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
Request a copy of MetricNet’s whitepaper on Help Desk Benchmarking.

Cost/Contact HigherLower
Higher
AFTER BENCHMARKING
STARTING POINT: BEFORE
BENCHMARKING
BEST-IN-CLASS
PERFORMANCE CURVE
AVERAGE
PERFORMANCE CURVE
Step 1: Benchmarking

Cost (Cost/Contact)
HigherLower
Higher
Step 2: Fine Tuning
Ideal Operating
Range
Moving To Lower Cost
Moving To Higher Quality

Moving to Higher Quality: Key Drivers
Quality
(Customer Satisfaction)
First Contact Resolution
(The Most Important Driver)
Training Hours
Call Quality
Technology
 KBase
 Remote
Diagnostic Tools
The Bottom Line
Every 1% Increase in First Contact Resolution Improves Customer Satisfaction by Approximately 1%!

First Contact Resolution Drives Customer Satisfaction
20%
40%
60%
80%
100%
20% 40% 60% 80% 100%
First Contact Resolution
CustomerSatisfaction

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
FirstContactResolutionRate

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
FirstContactResolutionRate

Cost (Cost/Contact)
HigherLower
Higher
Step 2: Fine Tuning
Ideal Operating
Range
Moving To Lower Cost
Moving To Higher Quality

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

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
CostperContact

The Agent Utilization Formula
Agent
Utilization
(Average number of contacts handled per agent per month) X (Average handle time in minutes)
(Average number of days worked in a month) X (Number of work hours in a day) X (60 minutes/hr)
=
Example
Agent
Utilization
(500 contacts/month) X (10 minutes/contact)
(21 working days per month) X (7.5 work hours per day) X (60 minutes/hr)
= 52.9%=

25© MetricNet, LLC, www.metricnet.com 25© MetricNet, LLC, www.metricnet.com
Agent Utilization: Benchmarking Results
20%
30%
40%
50%
60%
70%
80%
TechUtilization
High 74.3%
Average ----- 53.1%
Median 55.3%
Low 32.9%
Your Score 58.0%
Tech Utilization

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)
CostperContact

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

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
CostperContact

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

Cost of First Level vs. n-Level Resolution
Support Level
Cost per Incident
Resolved
Vendor
Desktop Support
Field Support
(inside company)
Level 2
(outside help desk)
Help Desk
$466
$138
$62
$41
$22

 As the Level 1 resolution rate increases, the cost per contact for Level 1 increases
 But the total cost per contact, including Level n costs, declines
 The cost of resolution at level n is typically 2X to 10X greater than at level 1
LOWER
HIGHER
COST HIGHER
Total Cost per Contact
FIRST LEVEL
RESOLUTION RATE
First Level Resolution Drives Total Cost of Ownership (TCO)
Level 1 Cost per Contact
Total Level n Cost
COSTPER
CONTACT

32© MetricNet, LLC, www.metricnet.com 32
Cost and Quality: Where Does Your Help Desk Land?
Lower Cost
Cost (Efficiency)
Quality(Effectiveness)
Top Quartile
Efficient and Effective
Lower Quartile
Middle Quartiles
Effective but not Efficient
Middle Quartiles
Efficient but not Effective
Your Help
Desk
Peer Group
Higher Cost
Lower
Quality
Higher
Quality
© MetricNet, LLC, www.metricnet.com

Some Final Thoughts
 Optimizing the Cost/Quality Tradeoff is a two-step process
1. Benchmark your Help Desk to maximize Efficiency and Effectiveness
2. Fine Tune your Help Desk performance to achieve the ideal operating
point
 Benchmarking will move your Help Desk 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 Agent Utilization to reduce Cost per Contact
 Don’t sacrifice quality for the sake of reducing costs!

Upcoming MetricNet Webcasts
Register at www.metricnet.com
Unleashing the Enormous Power of Service
Desk KPI’s
 Wednesday, April 15th, 2009 at 2:00 pm EDT
IT Customer Satisfaction Measurement
 Tuesday April 21st, 2009 at 2:00 pm - 3:30pm
EDT
For more information on Industry Best Practices, please register for
MetricNet’s free upcoming webcasts

Free Desktop Support Training Series | Cost vs. Quality in IT Support | MetricNet Certified

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