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%

Help

Desk B

ud

get

as a

% o

f T

ota

l IT

Sp

en

d

1988 1996 2000 2004 2008 1992

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)

Qu

ality

(C

usto

mer

Sati

sfa

cti

on

)

Higher Lower

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)

Qu

ality

(C

usto

mer

Sati

sfa

cti

on

)

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


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)

Qu

ality

(C

usto

mer

Sati

sfa

cti

on

)

Higher Lower

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 Higher Lower

Higher AFTER BENCHMARKING

STARTING POINT: BEFORE

BENCHMARKING

BEST-IN-CLASS

PERFORMANCE CURVE

AVERAGE

PERFORMANCE CURVE

Step 1: Benchmarking


Cost (Cost/Contact)

Qu

ality

(C

usto

mer

Sati

sfa

cti

on

)

Higher Lower

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

Cu

sto

mer

Sati

sfa

cti

on


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

Fir

st

Co

nta

ct

Res

olu

tio

n R

ate


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

Fir

st

Co

nta

ct

Res

olu

tio

n R

ate


Cost (Cost/Contact)

Qu

ality

(C

usto

mer

Sati

sfa

cti

on

)

Higher Lower

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

Co

st

per

Co

nta

ct


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%

Tech

Uti

lizati

on

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)

Co

st

per

Co

nta

ct


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

Cu

sto

me

r S

ati

sfa

cti

on


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

Co

st

pe

r C

on

tac

t


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

Cu

sto

mer

Sati

sfa

cti

on


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

CO

ST

PE

R

CO

NTA

CT

32 © MetricNet, LLC, www.metricnet.com 32

Cost and Quality: Where Does Your Help Desk Land?

Lower Cost Cost (Efficiency)

Qu

ality

(E

ffecti

ven

ess

)

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

Business

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