Benchmark Costs for Service Desks

A global service desk is the central point of communication between users and the IT department or the service provider who helps you to solve issues. At a first glance, this sounds very simple, but it is underestimated in many respects.

A service desk handles very important tasks and serves as a central distribution hub for the further processing of all kind of issues – from requests to major problems. For this very reason, the typical definition includes the following points:

• it should always be available and accessible,
• preferably on speed dial,
• and provide any answers to your questions immediately,
• in your native language.

And suddenly costs are exploding and the Service Desk is no longer profitable or affordable.

There are so many components that must be considered when setting up a service desk that all contribute to the overall costs. Therefore, it is important that you ask yourself what your general needs are and how they can be satisfied best. This article is intended to show you some important points to think about before building a service desk or restructuring it.

Explanation of the Global Service Desk itself

The general principle and the main benefit of a global service desk is already in the phrase itself: Global and Service. That means exactly what it should. Namely, a service e.g. help in solving a problem can be requested and received anywhere in the world, provided in most cases at any time. This principle already implies that, in the best case, it is a globally set-up service model.

That allows usage of economies of scale to a huge extend. Instead of separating countries or being limited by language barriers, end users can be offered user-friendly support only hours away from well-trained staff.

To use the full advantage of the Global Service Desk several prerequisites should be considered.

Features and characteristics that you should consider

As indicated, several features and characteristics should be considered in order to realize the full potential of the Global Service Desk and still remain cost-effective.

• Standardization
  Strive for standardization in general, but specifically with regard to tickets and input channels. This should also include harmonization of processes across entities, countries and support topics.
• Minimize options and way of communication
  That means that the number of channels should be limited (reduce phone options and email usage) to stay efficient in relation to how fast topics can be handled as well as cost-effective.
• Build-up of a standardized knowledge base
  A standardized knowledge base will bring several advantages:
   
  1. Knowledge is retained and cannot be lost and is constantly developed further
  2. New employees have good opportunities to learn and understand processes
  3. The possibility to do some kind of self-service will end up in constantly evolving employees as well as reducing costs, since there is less need for additional help.

All of the above mentioned points offer good savings potential by themselves. Combined and carried out on a global scale, automation projects suddenly have a large volume and thus business cases that justify their implementation.

Definition and Deployment of the right model

Several decisions need to be made to determine the most important things that need to be covered by the Global Service Desk. Nevertheless, one eye must always be kept on the costs. Otherwise, you will always take the most comprehensive offer without checking and weighing whether it is the right one for you.

What types and characteristics of support models exist?

Many things need to be considered to best tailor the support model to your needs. Some of them are listed below as examples:

• What is the Service Approach?
  Do you need a dedicated support model or is it enough to have a shared support?
• What Service Hours are necessary?
  Is it really necessary to have 24x7 support or is it maybe enough to go with 16x5 and On call support?
• Who will provide the Service?
  Where are the resources located?
• What is the best applicable pricing model?
  Is it possible to go with a fix-priced ticket model or is necessary to define something more specific?

These and other questions must be answered before a price comparison can be made. Otherwise, it would involve too many variables and uncertainties that would not allow a valid benchmarking.

Develop and apply the best fitting Cost Model

Services are not free of charge, of course. There has to be some kind of cost model that defines how much you have to pay for such services. Nevertheless, you have some options to define the most appropriate cost model for your service desk to stay cost-efficient.

The most important points and cost drivers you can examine more in detail in the article Benchmark Costs for Application Development. It is defined there for application support and development services, but can be applied to the service desk as well.

It is crucial to deploy the right resources

One of the most important decisions, and this is why it is again highlighted here, when implementing a Global Service Desk is the choice of resources. Who is going to serve all the requests?

Therefore, you have to deal with the possibilities of Off-/ Near-/On-shore staffing. What this means in detail, you are welcome to read in the article Benchmark Costs for Application Development .

For your Service Desk it is just important that you have experts in place that fulfil the following criteria:

• The resources speak either your native language or English (suitable for most cases)
• They can cover your business hours or whenever there is a need of solving problems

Going offshore would bring several benefits such as:

• Cost savings due to low labour costs
• Big labour pools with good knowledge of standardized technologies
• Coverage of early and late business hours
  

Exemplarily Costs comparison of 12 different regions

Now that enough questions have been raised, it is time to put some numbers on the table. Therefore, in the table below, the daily rates for a general service desk resource were compared and put into relation with each other.

Prerequisites and the importance of regional labour costs

This is to particularly highlight how important the globalization of a service desk is. Setting up a service desk in a low-wage country will bring other benefits besides cost savings, such as extended coverage of business hours and high number of qualified resources.

The compared resource is also divided into several seniorities that is based mainly on experiences in the respective area. Depending on the vendor and field of expertise, this classification may vary a bit, but in the end an approximate match will be found.

The resources compared in the following table are located in typical countries that are either:

1. Home to very large companies in the industrialized countries
   (US, UK, Germany)
2. Typical for setting up a global service desk, e.g. low labour costs
   (India, Philippines)

This should serve as an example of how large the regional differences in labour costs can be, and what immense savings opportunities a global setup offers.

Relative cost comparison for regions and a short example that will help understanding

Now a short example should bring more clarity for you on how to read the content of the table. The table had to be broken down to 3 parts - the onshore, nearshore and offshore countries.

The offshore countries are the cheapest and set the basis for the price markups in the others. A more detailed overview and analysis is given in the whitepaper.

In the table with the Offshore Countries the Tier 1 Tech Support resource in India and on the Philippines are highlighted in green with a value of 100%. This means that this resources are the cheapest of all the countries compared and forms the basis for the calculation of the others.

Now it was calculated for all other countries how much more you have to pay for the same resource. This is given in percent e.g. United Kingdom (UK) shows 680% which means at an exemplary price of 50€ in India 340€ would be due in UK. To better illustrate this, these price increases are colour coded from green, very cheap, to red, most expensive.

Legend & Scale

Help / Service Desk Resources

It is clearly evident that the same resources are much cheaper in emerging countries such as  India or the Philippines than in the usual industrialized countries such as the USA or Germany. Furthermore, it is also obvious that possible nearshore countries like Argentina for the USA or Poland for Europe already bring price advantages.

In our example above, for a low level of experience, India and the Philippines are the cheapest location. For more advanced levels of experience, India is the way to go. Either way, Offshore locations are beneficial from a cost perspective.

The same comparison could of course be made for ticket prices, which also strongly depends on the respective service model and the location of the resources.

Conclusion

Now that a lot of questions have been raised, hopefully some could be answered too, or what to look for to answer them. It is not easy to establish a well running and cost-efficient Global Service Desk. There are so many aspects to consider such as strong focus on standardization to establish ticket routing rules and processes, the location of resources and so on.

It is clear that low-wage countries in the emerging markets, such as the prototype for software support India, offer some advantages and should be considered when setting up a service desk.

Combined with all the other aspects mentioned above, it allows you to run a global service desk at low cost and continuously reduce the time spent while increasing end-user satisfaction.