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Published: itSMF Australia - September 2000
ServiceTalk - The Journal of the itSMF - December 2000
How Much Money Can An Organisation Save By Investing In The Help Desk?
Karen Ferris
It has always been difficult to place a dollar value on the Help Desk, especially for Help Desks supporting internal customers.
Normally, Help Desks do not generate revenue for the organisation but are a cost. The ability to show the financial value of an effective Help Desk, especially to management, can be very useful.
If we are looking for management to invest in the Help Desk (i.e. allocate budget) so that we can make it more efficient, we need to be able to prove that it is worth the investment.
Therefore we need to show the return on investment that would be realised by the organisation.
I have been able to do this for clients as part of the Help Desk HealthCheck service.
I have utilised a model which was published by “Bruton Consultancy For Helpdesk Best Practice” back in February 1999.
You can use this model to estimate the value an effective Help Desk would have for your organisation.
Firstly, we need to work out the impact of IT failure in terms of lost business productivity.
1. Find out your company turnover
2. Divide that by the number of employees
The result is the average contribution to turnover made by each employee, per year.
3. Divide that by 220 (typical number of working days in Australia)
4. Divide that by 8 (typical number of working hours in the day)
The result is the contribution to turnover made by each employee per hour.
Multiply this by the average dependency of the employee on IT. This is to allow for the fact that if IT is unavailable, the employee can get on with something else, but they are much less productive than they would have been if IT was working. For the purposes of this calculation, we will use 50%, but you can use any percentage you feel is appropriate for your organisation.
What you now have is the Lost Business Productivity (LBP) figure. This is how much the organisation loses in turnover contribution per employee, per hour, when IT is not working.
In order to put this into a real life context for an organisation, I then analyse some Help Desk call statistics.
If possible, I take a snapshot of open calls to the Help Desk and the time for which those calls have been active.
This snapshot usually shows calls open for more than 1 hour and less than 2, more than 2 hours and less than 3, more than 3 hours and less than 4, more than 4 hours and less than 5 and so on. It is up to you how many hourly units you calculate and whether you just want a day snapshot (i.e. up to 8 hours) or a week snapshot (i.e. up to 40 hours).
When you have these figures you can multiply the number of calls open for more than 1 hour and less than 2, by the LBP and by 1 (assume the impact was only for 1 hour).
Then multiply the number of calls open for more than 2 hours and less than 3, by the LBP and 2 (assume the impact was only for 2 hours).
Then multiply the number of calls open for more than 3 hours and less than 4, by the LBP and 3 (assume the impact was only for 3 hours).
Keep doing this for all the call statistics you have collected and this will give you the total LBP for those calls.
Note: If you are able to determine the “true” duration of the impact of a call on the employee rather than elapsed time, then your calculations will be far more accurate. For example, a call open for 24 hours may have only impacted the employee for 8 of those hours i.e. the employees working day.
Also note that in obtaining these figures I am using a best case scenario to try and simplify the calculations. All calls open for more than 1 hour and less than 2 would not have been resolved in 1 hour and all calls open for more than 2 hours and less than 3 would not have been resolved in 2 hours. However, to get more accurate figures you would have to obtain calls statistics on intervals of a minute rather than an hour.
In most organisations, I am unable to determine the number of employees impacted by each call due to the way in which calls are being recorded. Therefore I am assuming only one person impacted per call – again best case scenario). However, if you have this information, then add this to the calculation and multiply your results by the actual number of employees impacted.
I think that you will find the results of your calculations interesting, if not frightening.
The loss in productivity (LBP) can simply be minimised by investment in the Help Desk. Increased resources, training, knowledge bases, tools, Incident Management, Problem Management, improved documentation etc. can increase first line resolution and minimise the impact of IT failure on the organisation.
The following example is a fictional organisation, but I have based it on similar statistics to those from “real life” organisations for whom I have performed this service as part of a Help Desk HealthCheck.
ORGANISATION: MAKEMONEY PTY LTD.
The organisation has an annual turnover of 18 billion dollars.
The organisation has 67,000 employees.
$18 billion / 67,000 = $268657 which is the average contribution to turnover per employee per
year.
$268657 / 220 = $1221 which is the average daily contribution per employee.
$1221 / 8 = $152 which is the average hourly contribution per employee.
$152 x 50% = $76 which is the LBP (Lost Business
Productivity), per employee, when IT is unavailable)
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Call elapsed time
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Assumed downtime (a)
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No. of calls (b)
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LBP (a * b * $76)
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> 1 hour < 2 hours
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1
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60
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$4,560
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> 2 hours < 3 hours
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2
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105
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$15,960
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> 3 hours < 4 hours
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3
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46
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$10,488
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> 4 hours < 5 hours
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4
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92
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$27,968
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> 5 hours < 6 hours
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5
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22
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$8,360
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> 6 hours < 7 hours
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6
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98
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$44,688
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> 7 hours < 8 hours
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7
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112
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$59,584
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> 8 hours < 40 hours
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8
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2654
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$1,613,632
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| TOTAL |
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$1,785,240.00
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Note. In this example, we also looked at the number of calls
that had been open more than a day and less than a week, (> 8 and < 40) and assumed a downtime of no more than 8 hours (i.e. a best case
scenario).
Therefore a snapshot of calls open less than 1 week showed a loss in productivity to MAKEMONEY PTY LTD of
$1,785,240.
If this is a situation that occurs every week, the annual loss in productivity to this organisation is frightening.
Should MAKEMONEY PTY LTD invest in Help Desk improvements and reduce downtime to the business of IT failure??? I certainly think so.
So, next time you want to ask management for money to improve your Help Desk, show them the LBP figures you have calculated and therefore the return they will get on their investment. It will certainly help support your argument.
Karen Ferris Copyright © 2002 KMF Advance. All rights reserved. |
