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IT support metrics

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Hi,

Does anyone have any metrics I can use for tech support pricing? Assuming $x per hour normal hourly billing, how much should I charge for a monthly contract? What kind of variables do I want to look at?

Thanks!

Topic

what kindda support

In reply to IT support metrics

hi, are you dealing in hardware or software or both. If its software i believe you know about LOCS, hardware on the other hand is tricky coz you can’t estimate much. am interested in this too and i hope members out there will help us out.

Metrics metrics everywhere, but not a ticket to waste

In reply to IT support metrics

You can email me directly at Nathan.Fisher@vs-hydro.com to ask for more metrics, but I’ll throw out some ideas for you. In my past job of 4 years, I was the QA coordinator of our service contract for EDS and have some experience with this.
1) Do BOM, or bill of materials for hours used. We billed out our customer at approximately $60 per hour for special services, but I would bet with today’s economy, it would be probably around $40-$45 per hour. This assumes the tech cost, medical insurance overhead, and a reasonable profit, with also some kickbacks to corporate if you’re a global company. I’d lower it to about $32-$35 per hour if you’re a small company trying to compete. I’d use this type of billing method for leveraged support on smaller accounts where you don’t really need a tech full time, or even some ad-hoc work you are doing outside of your normal workscope contract.

2) Flat fee desktop cost per seat. This would probably be used on larger accounts, assuming the ratio of approximately 125 seats per 2nd level tech. The billing rate of $60 per month per seat was what we used, but again, with the economy a little differently “abled” to tech support, that may be lowered to $45-$50 per seat. This includes software and hardware support for all tickets per month, not counting extra hardware costs. For instance, your client SHOULD have all machines in warranty, but if not, you should not absorb the cost for hard drives, monitors, etc when they go bad. If they are out of warranty parts, just tack the price of the replacement parts to your monthly billing by itemizing what part and part number was attached to what ticket number. Do NOT over-inflate this cost. So, if you had a building of users with 250 seats, you would have about 2 techs to support this at a revenue of about 11,250 or 12,500 and you would have costs for two techs at about 60% of that. You then kick in about 20% for management and materials cost and then you make out at about 20% profit. The larger account you have, the lower percentage margin profit you want – you trade revenue dollars, gross profit, and exposure to lower a percentage number. On smaller accounts, the margin will be higher due to insurance, risks, and the cost to staff (turnover, etc). EDS was using our account in Philly as the model for this on all mid-sized accounts they had in support. We ended up losing the contract, I believe, because our profit margin was too high. Adjust the model accordingly, but be flexible to the customer’s needs.

One problem you may face is service levels with this model. EDS did different tiers, in that, for example, the “gold” rate of $60 per month per seat would bring the highest service levels, etc. What you don’t want to face is overperforming at such a high level with “gold” standards that the customer wants the “silver” package because they can absorb lower service levels for a much lower cost per month, which was our trap.
We had established models of service that were, I believe, absolutely amazing. Before I arrived at the account, approximately 45 tickets out of 1200 per month went over service level and within a few months, for four years or so straight, we had less than 5 service level violations per month for nearly 1500 tickets (we had growth).

The idea is to underpromise and over-deliver. So many people, I believe, fall into the trap of setting expectations TOO high, and cannot live up to them, setting them up for a contract with the customer that is riddled with failure rather than to underpromise and over-deliver, which sets up a relationship of success.

This success then leads the customer to trust that you make good on your contracts, and may allow you to do the following:
1) Broaden your existing offerings. You may only support a few buildings in one state and another company provides support in another. With over-delivering, you may end up taking business away from the competitor.
2) Secure new offerings. If they see you doing a great job with support, maybe you then can land phone support or even network support.
3) Leverage resources, and providing job enrichment and vertical movement. Perhaps a phone tech one day can fill in for a desktop guy that calls off. Maybe when desktop guys leave, you fill them in with phone guys, who are promoted. This keeps your employment costs down on support while providing the opportunity for vertical movement in your company. This keeps costs down, and thus allows you to keep your contract costs very competitive.

Well, that’s all for now. Email me if you want some actual types of measurements we’d actually use to gauge our success.

I’m now just a desktop guy, at a company that I love. The economy was hard in that my type of job was one of the first to go, with me not quite being an account executive for sales, and not quite being the tech manager to hire and fire people, and not quite the tech to be productive. I was considered a “non-productive” asset on the account because my job did not produce tangible results like field work, but my job actually is there to ensure we keep our contracts, keep a great profit, and to ensure the integrity of our company standards. Loved the job, would do it again in a heartbeat.

Metrics

In reply to IT support metrics

Define the services you will be offering. By metrics, I assume you mean, what is the average time spent on a given type of problem?

We calculate, on average, spending 2 hours per pc per month supporting application, OS and minor HW problems (like replacing a NIC. We charge for the NIC btw). Now, depending on the client makup, it can be more or less.

Old pc’s + Win 98 + 15 different apps = much more support time vs a shop w/ pristine Dell pc’s w/ Windows XP Pro running Office apps.

Now, we have the law of averages on our side for the most part as we support over 1000 pc’s, so one client may be painful one month, then quiet the next.

You’ll also want a good, managed av setup and firewalls at all clients in order to keep the self inflicted wounds to a minimum.

At the inception, you can get the client to purchase things like firewall, Corporate versions of av software, a good switch to replace the aging hub, etc… that they won’t do 6 months from now. Get it straight in the beginning and you will be much better off, as will the client, down the road.

You will want to define normal support hours and have charges for out of normal hours support work.

Finally, get most, if not all of the money up front for any purchases you need to make on the client behalf, at least until they have a good track record with you. Too many want to wait 60 days to pay their bills. You may want to locate a good collection agency (I know a couple) ahead of time.

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