Three Key Metrics that Impact the Bottom Line
With the proliferation of analytics, service organizations now have easy access to a wide variety of metrics. While all of the metrics are interesting and helpful, they are not all created equal. Research shows that there are three metrics that have the most direct impact on service performance and profitability: SLA compliance, first-time fix rate and workforce productivity.
While these metrics are pretty common, what does surprise people is how much a company can cut costs with a minor improvement in these numbers. For each metric, we’ve created a comparison between the revenues associated with the industry average, and companies that score in the top 20%.
The calculations below are based on a mid-sized company with 100 technicians who complete the industry average of 4.8 jobs per day, or 120,000 service calls per year.
First-Time Fix Rate
Being unable to resolve an issue on a first call results in longer asset downtime for the customer, and can result in missed service level agreements. However, what is just as costly to companies is the secondary dispatch. The AberdeenGroup estimates that the average cost per dispatch is $241, making eliminating secondary dispatch a great way to streamline costs.
Average: 67% first call resolution rate
Top 20%: 81% first call resolution rate
Again, assuming that a company has 120,000 service calls per year, a 67% first time fix rate, means that 33% of these services calls (39,600) would require a second dispatch. By comparison, with an 81% first-time fix rate, only 22,800 calls would require a second visit.
| Average: 67% first-time fix rate | Top 20%: 81% first-time fix rate |
| 39,600 service calls requiring secondary dispatch
x $241 cost per dispatch = $9.5 million spent annually on secondary dispatch |
22,800 service calls requiring secondary dispatch
x $241 cost per dispatch = $5.5 million spent annually on secondary dispatch |
As you can see, increasing the first-time fix rate results in a cost savings of $4 million.
Workforce Productivity (Jobs Completed per day)
This metric is pretty straightforward. The more jobs you can complete in a day translates directly into increased revenue.
Average: 4.8 jobs per day per technician
Top 20%: 5.6 jobs per day per technician
What if your techs could complete an extra job a day? In the scenario we’ve created, that would mean an extra 20,000 service calls could be completed.
| Average: 4.8 jobs per tech per day | Top 20%: 5.6 jobs per tech per day |
| 100 technicians x 4.8 work orders per day x 250 working days per year = 120,000 service calls/year | 100 technicians x 5.6 work orders per day x 250 working days per year = 140,000 service calls/year |
Now the company is completing an extra 20,000 jobs per year. With an average revenue per job at $150, the company is now generating an extra $3 million in revenue.
SLA Compliance
This metric is probably the most watched metric by companies. Not only can you stop service “giveaways” by meeting your agreements, you can also potentially sell more agreements, creating a predicable revenue stream.
Average: 82% compliance rate
Top 20%: 93% compliance rate
SLA agreements are structured in lots of different ways. However, research suggests that every missed SLA represents $163 in lost revenue.
With an average compliance rate of 82%, out of the 120,000 service calls per year, the company would have missed the SLA on 21,600 calls. In comparison, with a compliance rate of 93%, a company would only mill the SLA on 8,400 calls.
| Average – 82% compliance rate | Top 20% - 93% compliance rate |
| 21,600 missed SLA calls
x $163 lost revenue rate = $3.5 million lost revenue |
8,400 missed SLA calls
x $163 lost revenue rate = $1.4 million lost revenue |
By increasing compliance rate, the company saved almost $2 million
Improving your numbers
There are a number of steps your company can take to improve these metrics.
Automating Field Service
Automating your field service helps you manage complex field service operations, ensuring that nothing falls through the cracks. Easily manage complex contracts, get alerts when SLAs are in danger of being missed, keep track of inventory and track all service calls.
Optimize Scheduling
Optimizing your dispatch and scheduling results in field service representatives spending less time sitting idle at home or on the road. It also ensures that not just the closest technician, but the technician with the right skill sets and parts gets sent to a job, making it more likely that a call be resolved the first time. You can also factor SLA requirements into scheduling criteria, making them a priority.
Getting Information to the Front Line
Arming your field workforce with a mobile solution can give your field service representative access to two critical areas of information. First, the technician can access the service history and learn what has been done in the past. He can also be linked to a knowledge management system where he can access issue resolution scenarios, product schematics, and best practices information. This information helps the representative solve the problem faster, and on the first call.
Want more information?
- Download the Metrix Service datasheet
- Download the Metrix Advanced Scheduling datasheet
- Download the Metrix Mobile datasheet
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