Skip to main content

The Best of Service Operation, Part 1

Image
By
We continue our "Best of " blog series by moving into Service Operation.
 
Cost per Incident
Originally Published on August 17, 2010

A reader, upon downloading our ITIL ROI calculator, recently asked the following great question, “how do you determine cost per incident?”

Cost per incident is a variation of cost per call or cost per contact, all of which are excellent ways to understand the impact of incidents, calls, or contacts on the business.

The calculation is fairly straightforward. Cost per incident is the total cost of operating your support organization divided by the total number of incidents for a given period (typically a month).

Cost per incident = total costs/total incidents

To accurately calculate cost per incident you must:
  • Log all incidents. You may also find it beneficial to distinguish between incidents (unplanned events) and service requests (planned events). Such a distinction will enable you to more accurately reflect business impact
  • Identify stakeholders. Determine all of the support people involved in the incident management process (e.g., service desk and level two/three technical and application management teams). 
  • Identify associated costs. Create a list of every cost associated with your stakeholders including salaries, benefits, facilities, and equipment. Many of these costs will be included in your annual budget or can be obtained from financial management.
As illustrated in the ROI calculator, tremendous cost savings can be realized by reducing the number of incidents. This can be accomplished by using trend and root cause analysis techniques via the problem management process, as well as through integration with processes such as change management, service asset and configuration management, and release and deployment management.

Savings can also be realized by reducing the number of incidents escalated from the service desk to other lines of support, or by increasing the number of incidents handled via self-help services such as a web-based knowledge management system. Some organizations report on cost per incident per channel (e.g., per call, e-mail, chat, walkup) to better understand these savings.
Labels:

Comments

Post a Comment

Popular posts from this blog

Four Service Characteristics

By
Recently I came across several articles by researchers and experts that laid out definitions and characteristics of services. ITIL provides us with a definition that can help drive the creation of value-laden services: A means of delivering value to customers by facilitating outcomes customers want to achieve without the ownership of specific costs and risks. An area that ITIL is not so clear is in terms of service characteristics. Several researchers and experts put forth that services have four basic characteristics (IHIP): Intangibility—Services are the results of actions not things. They have no physical presence and represent a logical set of elements. One way to think of service is “work done for others.”  Heterogeneity—Also known as “variability”; services are unique items because of the mechanisms used to deliver services, which is people. Because the people element adds variability, the service is variable. This holds true, especially for the value proposition—not eve...
Post a Comment
Read more

What is the difference between Process Owner, Process Manager and Process Practitioner?

By
This article was originally published in 2015. With the Introduction of ITIL 4, some of the concepts have changed in ways that are described below. ITIL 4 has also introduced new roles, as explained in our blog ITIL 4 and the Evolving Role of Roles . Before we dive into the difference between these roles, let’s first look at a key update in ITIL 4 – the shift from processes to practices. ITIL 4 has evolved to focus on holistic practices vs. isolated processes. By definition, a practice is a set of organizational resources designed for performing work or accomplishing an objective. For example, the purpose of the incident management practice is to minimize the negative impact of incidents by restoring normal service operation as quickly as possible. All organizations recognize the need to allocate resources to the management of incidents and mature their capabilities in that area. In ITIL 4, each practice includes resources based on the four ...
1 comment
Read more

What Is A Service Offering?

By
The ITIL 4 Best Practice Guidance defines a “Service Offering” as a description of one or more services designed to address the needs of a target customer or group.   As a service provider, we can’t stop there!   We must know what the contracts of our service offering are and be able to put them into context as required by the customer.     Let’s explore the three elements that comprise a Service Offering. A “Service Offering” may include:     Goods, Access to Resources, and Service Actions 1. Goods – When we think of “Goods” within a service offering these are the items where ownership is transferred to the consumer and the consumer takes responsibility for the future use of these goods.   Example of goods that are being provided in the offering – If this is a hotel service then toiletries or chocolates are yours to take with you.   You the consumer own these and they are yours to take with you.      ...
Post a Comment
Read more