Leveraging KPI’s to Maximize the ROI of Support
Jeff Rumburg • MetricNet
More than 3,000 IT Service and Support Benchmarks
Global Database
30+ Key Performance Indicators
Nearly 60 Industry Best Practices
Empirical Observations from Our Global Database
10 Mega Trends: Service and Support as a Business
Holistic use of KPI’s and Benchmarking
Process Optimization (ITIL, ITSM)
User Self-Help
Desktop Virtualization
Marketing Service and Support
Understanding of TCO and First Level Resolution
Knowledge Management
Remote Diagnostic Tools
The Widespread Adoption of ROI Analysis
Service and Support as a Business
3© 2014 MetricNet, LLC, www.metricnet.com
4
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
© 2014 MetricNet, LLC, www.metricnet.com
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)
5
The Cost Center Dilemma in IT Service and Support
Responsible for cost control
Not responsible for…
Revenue generation
Profits
Investment decisions
Cost Center Profit Center
© 2014 MetricNet, LLC, www.metricnet.com
VS.
Creates economic value
Demonstrates profitability
Cost savings
Cost Benefit Analysis
ROI Analysis
The vast majority of service and support organizations operate as cost centers
They are expected to control costs, but are not expected to make any explicit financial
contribution to the enterprise
The focus in a cost center is on minimizing costs
The focus in a Profit Center is on creating and maximizing value!
6
Do Profitable Businesses Offer a Solution?
© 2014 MetricNet, LLC, www.metricnet.com
7
Sources of Value: Demonstrating Profitability
IT Service and Support can create value in a number of ways:
Minimizing Total Cost of Ownership (TCO) by maximizing level 1
resolution rates
Improving end-user productivity by reducing incident resolution
times
Reducing ticket volumes through technology and Root Cause
Analysis
Mitigating the effects of unplanned downtime through planning,
prevention, and aggressive remediation
© 2014 MetricNet, LLC, www.metricnet.com
Total Cost of Ownership: North American Averages
Support Level Cost per Incident
Vendor
Level 2: Desktop Support
Field Support
Level 3 IT
(apps, networking, NOC, etc.)
Level 1: Service Desk
$471
$196
$85
$62
$22
8© 2014 MetricNet, LLC, www.metricnet.com
9
0
10
20
30
40
50
60
70
0 1 2 3 4 5
Pro
du
cti
ve H
ou
rs L
ost
per
Em
plo
yee p
er
Year
IT Support Returns Productive Hours 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 QuartileSupport Function Key Performance Indicator
37.4 46.9Average Productive Hours Lost per Employee per Year 17.1 25.9
Performance Quartile n = 60
© 2014 MetricNet, LLC, www.metricnet.com
10
Reducing Ticket Volumes -- Root Cause Analysis: Level -1
© 2014 MetricNet, LLC, www.metricnet.com
Metric Beginning of Year End of Year Change
End-Users Supported 8,190 8,650 460
Monthly Ticket Volume 21,300 19,100 -2,200
Monthly Tickets per User 2.60 2.21 -0.39
Annual Operating Expense $4,769,496 $4,226,448 -$543,048
Cost per Ticket $18.66 $18.44 -$0.22
Annual Cost per User $582 $489 -$94
11
Reducing the Cost of Downtime
Cost of Downtime
Productivity
LossesBusiness Losses
Lost productivity from
employees who are idled
or slowed by the outage
© 2014 MetricNet, LLC, www.metricnet.com
Lost sales
Lost customers
Product spoilage and
shrinkage
Damage to business
reputation
12
ROI Case Study
ROI Defined
13© 2014 MetricNet, LLC, www.metricnet.com
ROI =Return
Investment=
Savings
Spending
ROI is a simple ratio
It requires quantification of Return (Savings), and Investment
(Spending)
It is measured over a one-year timeframe (One Year ROI is implied in
the metric)
It is one of the most widely used and accepted financial metrics
It can be used prospectively, as part of a Business Case Analysis
…Or retrospectively to evaluate the past business success
14
An Industry Case Study
The Scenario
An insurance company spending $4.8
million per year on their service desk
The service desk supports 8,190 users
And handles 21,300 tickets per month
© 2014 MetricNet, LLC, www.metricnet.com
15
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
© 2014 MetricNet, LLC, www.metricnet.com
Case Study Part 1: Minimizing Service and Support TCO
A SPOC Service Desk is Highly Leveraged
User CommunityLevel 1:
Service Desk
Level 2:
Desktop
Support
Field
Support
Level 3:
IT Support
Vendor
Support
16© 2014 MetricNet, LLC, www.metricnet.com
Key SPOC Principles
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
© 2014 MetricNet, LLC, www.metricnet.com 17
© 2014 MetricNet, LLC, www.metricnet.com
Two Metrics You Should Know
First Level Resolution Rate (FLR)
The number of tickets resolved at level 1 divided by all
tickets that can potentially be resolved at level 1.
% Resolved Level 1 Capable (PRLC)
The percentage of tickets resolved by desktop support
that could have been resolved at level 1 support.
18
19© 2014 MetricNet, LLC, www.metricnet.com
Industry Data for Level 1 Resolution
0
5
10
15
20
25
30
35
40
45
50
55
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100%
Net First Level Resolution Rate
Num
ber
of D
ata
Poin
ts
Average ------ 73.9%
Max 98.9%
Min 24.0%
Median 75.0%
> 95% Net FLR 2.0%
Industry Average Net FLR Statistics
Net First Level Resolution Rate
Nu
mb
er
of
Data
Reco
rds
0
2
4
6
8
10
12
0% 2% 4% 6% 8% 10%
12%
14%
16%
18%
20%
22%
24%
26%
28%
30%
32%
34%
36%
38%
40%
% Resolved Level 1 Capable
Nu
mb
er
of
Su
pp
ort
Org
an
izati
on
s
Fir
st
Quart
ile =
12.7
%.
Fourt
h Q
uart
ile =
24.3
%.
Media
n =
18.1
%
Industry Data for % Resolved Level 1 Capable
20© 2014 MetricNet, LLC, www.metricnet.com
21
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Ne
t F
irs
t L
ev
el R
es
olu
tio
n
Remote Diagnostic Software No Remote Diagnostic Software
The Effect of Remote Diagnostic Software on FLR
Average = 77.8% FLR
Average = 61.4% FLR
© 2014 MetricNet, LLC, www.metricnet.com
22
The Effect of a Mature Knowledge Base on FLR
© 2014 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
Ne
t F
irs
t L
ev
el R
es
olu
tio
n
23
The Result: Maximizing First Level Resolution Rates
© 2014 MetricNet, LLC, www.metricnet.com
93% = Insurance Company First Level Resolution Rate
- 74% = Industry Average First Level Resolution Rate
=================================================
19% Higher First Level Resolution Rate than Industry Average
X 21,300 Tickets per Month X 12 Months per Year
=================================================
48,564 More Tickets Resolved at Level 1 each Year vs. Average
X $62 per Ticket Escalated Beyond Level 1
=================================================
$ 3.0 Million Estimated Annual Savings by Minimizing TCO
24
0
10
20
30
40
50
60
70
0 1 2 3 4 5
Pro
du
cti
ve H
ou
rs L
ost
per
Em
plo
yee p
er
Year
Case Study Part 2: Returning 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 QuartileSupport Function Key Performance Indicator
37.4 46.9Average Productive Hours Lost per Employee per Year 17.1 25.9
Performance Quartile n = 60
© 2014 MetricNet, LLC, www.metricnet.com
25
The Result: Returning Productive Hours to End-Users
© 2014 MetricNet, LLC, www.metricnet.com
33 Hours = Industry Average Lost Productivity per User per Year
- 17 Hours = Insurance Company Estimated Lost Productivity per User
====================================================
16 Hours in Saved Productivity per User per Year
X 8,190 End-Users
====================================================
131,040 Productive Hours Returned to the Workforce each Year
÷ 1,700 Productive Hours per User per Year
====================================================
77.1 FTE Headcount Savings per Year
X $82,300 Annual Salary and Benefits per User
====================================================
$ 6.3 Million Estimated Annual Savings from Returned Productivity
26
Case Study Part 3: Cost Savings from Root Cause Analysis
© 2014 MetricNet, LLC, www.metricnet.com
Metric Beginning of Year End of Year Change
End-Users Supported 8,190 8,650 460
Monthly Ticket Volume 21,300 19,100 -2,200
Monthly Tickets per User 2.60 2.21 -0.39
Annual Operating Expense $4,769,496 $4,226,448 -$543,048
Cost per Ticket $18.66 $18.44 -$0.22
Annual Cost per User $582 $489 -$94
$ 94 in Savings per User per Year
X 8,650 End-Users
=========================================
$ 813,100 Estimated Savings from Root Cause Analysis
27
Return on Investment: Summing it Up
© 2014 MetricNet, LLC, www.metricnet.com
$ 3.0 Million Estimated Annual Savings from Minimizing TCO
+ $ 6.3 Million Estimated Annual Savings from Returned Productivity
+ $ 0.8 Million Estimated Savings from Root Cause Analysis
====================================================
$ 10.1 Million Estimated Economic Contribution per Year
Estimated ROI = $10.1 Million ÷ $4.8 Million = 210% per Year
Return Investment
28
Cost of Downtime
Cost of Downtime
Productivity
LossesBusiness Losses
Lost productivity from
employees who are idled
or slowed by the outage
© 2014 MetricNet, LLC, www.metricnet.com
Lost sales
Lost customers
Product spoilage and
shrinkage
Damage to business
reputation
29
Cost of Unplanned Downtime
Cost of Prevention and Readiness
Co
st
of
Un
pla
nn
ed
Do
wn
tim
e
Empirical data shows that the
more an enterprise spends on
outage prevention and
readiness, the lower the cost
of unplanned downtime will be
© 2014 MetricNet, LLC, www.metricnet.com
30
Total Cost of Downtime
Cost of Prevention and Readiness
Co
st
of
Pre
ven
tio
n +
Do
wn
tim
e
The TCO for downtime must
include the costs of
prevention, readiness,
downtime, and recovery
Point of Minimum
Total Cost
© 2014 MetricNet, LLC, www.metricnet.com
31
Downtime Mitigation Strategies for Service and Support
Disaster Recovery Drills
Outbound user notifications for planned outages
Outbound user notifications for major unplanned outages
Recorded messages to inform inbound callers that
service and support is aware of and working to resolve
any major issues
© 2014 MetricNet, LLC, www.metricnet.com
The Critical Metrics of ROI
Annual Operating ExpenseInvestment
Return Estimated Annual Savings / Economic
Contribution
Root Cause
Productive Hours Returned to Users
Downtime Mitigation of Unplanned Downtime
Efficiency
% Resolved Level 1 CapableTCO
First Level Resolution Rate
© 2014 MetricNet, LLC, www.metricnet.com 32
Tickets Avoided
33
The Big Picture for ROI Metrics
34
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
© 2014 MetricNet, LLC, www.metricnet.com
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)
35
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
© 2014 MetricNet, LLC, www.metricnet.com
IT Support Has an Opportunity to Minimize TCO
36
0
10
20
30
40
50
60
70
0 1 2 3 4 5
Pro
du
cti
ve H
ou
rs L
ost
per
Em
plo
yee p
er
Year
Quality of Support Drives End-User Productivity
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 QuartileSupport Function Key Performance Indicator
37.4 46.9Average Productive Hours Lost per Employee per Year 17.1 25.9
Performance Quartile n = 60
© 2014 MetricNet, LLC, www.metricnet.com
37
Proactive IT Support Can Reduce Ticket Volumes
© 2014 MetricNet, LLC, www.metricnet.com
Metric Beginning of Year End of Year Change
End-Users Supported 8,190 8,650 460
Monthly Ticket Volume 21,300 19,100 -2,200
Monthly Tickets per User 2.60 2.21 -0.39
Annual Operating Expense $4,769,496 $4,226,448 -$543,048
Cost per Ticket $18.66 $18.44 -$0.22
Annual Cost per User $582 $489 -$94
$ 94 in Savings per User per Year
X 8,650 End-Users
=========================================
$ 813,100 Estimated Savings from Root Cause Analysis
38
Return on Investment: Summing it Up
© 2014 MetricNet, LLC, www.metricnet.com
$ 3.0 Million Estimated Annual Savings from Minimizing TCO
+ $ 6.3 Million Estimated Annual Savings from Returned Productivity
+ $ 0.8 Million Estimated Savings from Root Cause Analysis
====================================================
$ 10.1 Million Estimated Economic Contribution per Year
Estimated ROI = $10.1 Million ÷ $4.8 Million = 210% per Year
Return Investment
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
% S
ayin
g V
ery
Im
po
rtan
t
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
39© 2014 MetricNet, LLC, www.metricnet.com
IT Support Drives Customer Satisfaction for All of IT
© 2013 MetricNet, LLC, www.metricnet.com
Bottom Line: The Business of IT Service and Support
IT Service and Support can and should be
viewed as a business and a profit center
You must quantify your value (Return) to the
enterprise
And then demonstrate your profitability!
40
Question and Answer
Jeff Rumburg • MetricNet
For More Information
Read MetricNet’s whitepaper on Service and Support as
a Business
http://www.metricnet.com/service-and-support-as-a-
business
© 2014 MetricNet, LLC, www.metricnet.com 42
Please make sure to complete an
evaluation on your smartphone by going to
www.HDIConference.com/Eval, or by going
to the HDI 2014 mobile conference app.
Thank you for attending this session
Question and Answer
Jeff Rumburg • MetricNet
45
About MetricNet
46© 2014 MetricNet, LLC, www.metricnet.com
Benchmarking is MetricNet’s Core Business
Call Centers
Telecom
Information
Technology
Satisfaction
Technical Support
Customer Service
Telemarketing/Telesales
Collections
Service Desk
Desktop Support
Field Support
Price Benchmarking
Customer Satisfaction
Employee Satisfaction
MetricNet Benchmarks
MetricNet
Benchmarks
Peer Group
Benchmarks
Industry
Benchmarks
Benchmarking
Data Files
© 2014 MetricNet, LLC, www.metricnet.com 47
Custom Benchmark
Unique Peer Group
Industry Benchmarking
Reports by geography
Custom Benchmarking
Data in Excel format
More than 3,000 IT Service and Support Benchmarks
Global Database
30+ Key Performance Indicators
Nearly 60 Industry Best Practices
25 Years of Service and Support Benchmarks
49
Your Presenter: Jeff Rumburg
© 2014 MetricNet, LLC, www.metricnet.com
Jeff Rumburg is a co-founder and Managing Partner at MetricNet,
LLC. Jeff is responsible for global strategy, product development,
and financial operations for the company. As a leading expert in
benchmarking and re-engineering, Mr. Rumburg authored a best
selling book on benchmarking, and has been retained as a
benchmarking expert by such well-known companies as American
Express, Hewlett-Packard, and GM. Prior to co-founding
MetricNet, Mr. Rumburg was president and founder of The Verity
Group, an international management consulting firm specializing in
IT benchmarking. While at Verity, Mr. Rumburg launched a number
of syndicated benchmarking services that provided low cost
benchmarks to more than 1,000 corporations worldwide.
Mr. Rumburg has also held a number of executive positions at META Group, and Gartner, Inc. As
a vice president at Gartner, Mr. Rumburg led a project team that reengineered Gartner's global
benchmarking product suite. And as vice president at META Group, Mr. Rumburg's career was
focused on business and product development for IT benchmarking. Mr. Rumburg's education
includes an M.B.A. from the Harvard Business School, an M.S. magna cum laude in Operations
Research from Stanford University, and a B.S. magna cum laude in Mechanical Engineering. He
is author of A Hands-On Guide to Competitive Benchmarking: The Path to Continuous Quality
and Productivity Improvement, and has taught graduate-level engineering and business courses.
Mr. Rumburg serves on the Strategic Advisory Board for HDI.
Meet a Sampling of Our Clients
MetricNet Conducts benchmarking for IT Service and Support
organizations worldwide, and across virtually every industry sector.
© 2014 MetricNet, LLC, www.metricnet.com 50
You Can Reach MetricNet…
By Phone…
703-992-7559
On Our Website…
www.metricnet.com
Or E-mail us…
© 2014 MetricNet, LLC, www.metricnet.com 51
Leveraging KPI’s to Maximize the ROI of Support
Jeff Rumburg • MetricNet