You Can’t Manage What You Don’t Measure
The IT service industry utilizes many metrics by which efficiencies are sought and costs are managed. It’s especially important to continuously measure and evaluate service metrics when utilizing on-demand professionals to execute your IT service dispatch calls, so that you can repeatedly engage the best professionals available to ensure that your customer is up and running as soon as possible.
Renowned management expert Peter Drucker first told us “You can’t manage what you can’t measure.” Accordingly, you must carefully consider success metrics when measuring your service delivery performance. Metrics are considered the levers a service business needs to adjust or improve your progress along the path to client success and the growth of your organization.
IT service businesses utilize numerous key performance indicator (KPI’s) to measure success, monitor change, and modify outcomes for success. However it is alarming that a large number of service businesses do not define, track nor analyze their business using the industry’s best practice benchmarks. Instead, they define their success by using high level business assumptions, such as:
- I calculate my profit by subtracting my technician’s hourly salary from what I charge per hour.
- I want a 40% margin so I’ll price my services and then calculate my cost as 60% of that to arrive at my profit.
- If I have a full-time employee there’s no further cost to me to use them to deliver services.
- Everybody who delivers services for me must be getting a W-2 form from me each year.
- I charge by the hour
And there are so many more. As a result, some business owners go to sleep each night not really knowing if they’re operating profitably…or not.
Some examples of widely accepted service delivery metrics include: first call resolution, average repair time (aka time-on-task), technician utilization, average travel and the percentage of ordered parts that are returned unused, just to name just a few.
Why Assign & Measure Costs
In another of our blogs we focused in on the importance of knowing your true fully-burdened cost of a technician’s hour. It’s far beyond just salary and includes taxes, benefits, training, transport, tooling, and much more. By including all these “burdens” into your cost you arrive at a far more accurate computation of your operating profit. Go out there and relentless seek more hidden costs to include in your burden because if you measure them, you can manage them and that means reducing them.
Why Measure Time?
There are so many excellent time-based metrics to examine in the service business. Response time between the customer’s service request and your first contact with them is translated directly into the customer’s satisfaction with your service. The faster your response, the more customers you’ll retain, resulting in an increase in business.
Similarly, resolve time tells you how long it took to actually deliver the service your customer requested and get them back to full working condition. Beyond being another great customer satisfaction metric, a comparative study of the different response time averages between each member of your staff can often expose a technician who takes radically longer than others, or a superstar who knocks out the work in record time. Both of these are valuable facts that help guide your management of these people.
Parts is Parts
When thinking about your performance metrics, don’t forget to consider how repair parts fit into the equation. The length of time it takes to obtain parts is crucial to guaranteeing your technician has what he or she needs onsite to resolve the client’s technical issues. When you inform a parts vendor that they are the slowest of all your vendors to deliver on time, this metric helps you motivate your suppliers to perform better. Magic follows.
Of all the service tools used in your practice, analytics is the most important one.
NPF, “No Problem Found” is a metric used by manufacturers to expose service providers who may be taking shortcuts, or trying to game their warranty system. Keeping track of how many parts are delivered broken, who orders multiple parts for a single fix or that consistently report “Wrong Part Ordered” allows you to identify vendors and technicians that are negatively impacting your performance KPI’s.
On a positive note, tracking usage of the parts that are your most “frequent flyers” reveals product design failures regularly, often down to the component level, and provides valuable product insight to your manufacturer-partners when you supply that feedback data. Of course, you’ll want to track parts utilization so you can properly adjust your local stocking levels too.
Someone Needs to Own Analytics
Of all the tools used in your practice, analytics is the most important one. The more you measure the more you learn about the right and wrong, the good and bad of your own organization. Ask yourself:
- What are the most important goals for my service organization this year?
- How do we get the information we need?
- How do we disseminate that information to the right people?
Then decide which four to five KPIs from your list are essential for you and your customers.
Use Technology to Track and Measure
Technology platforms have made it easier to identify what to measure, and to retrieve accurate information quickly. So while service delivery KPIs themselves have remained relatively stable over the last decade, service managers’ ability to set smart goals, track performance, and make informed changes are among the tools needed to perform well and exceed customer expectation. Milestone reporting becomes even more critical when you are utilizing an on-demand labor solution as part of your overall field service delivery solution. Decide what you want to measure, and then work with key vendors like Techadox to provide the reports that you need to successfully manage your service business outcomes. And don’t forget to share this data with your own team to keep them in the loop and motivated.
To learn how the TDX Marketplace helps service executives manage and measure critical KPIs associated with the use of on-demand professionals, reach out to your Techadox sales representative today.