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Consolidating Service Desk and Desktop Support. Your thoughts, please?

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I think it's a great move to merge your desktop support. Basically both would be involved in incident management, and how they do it is up to your strategy.

Maybe you can have half your people rotate into a service desk role on a rota basis. This way, desktop support employees perform both roles, and you can cut the monotony associated with it.

I had tried a similar experiment in one of my previous employments, and it had paid off rich dividends.

If you are further planning on cutting the costs, you can set up an online ticket system where users raise tickets by themselves, this will definitely increase efficiency - another improvement that I have tried and came out successfully. Let me know if you need further assistance.