WHITE PAPER. IT Outsourcing HDI INDUSTRY BENCHMARK REPORT SERIES Bomgar Corporation. All Rights Reserved bomgar.com
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1 IT Outsourcing
2 OVERVIEW Each year, HDI releases the HDI Practices & Salary Report based on the results of more than 800 surveys submitted by support centers worldwide. The published report provides IT support professionals with a benchmark against which to measure their support centers performance. In addition to the published report, HDI has made available, for the first time, supplemental survey results that provide additional benchmark data on the performance of IT support services in 2010 in outsourced services. The data presented in the 2010 HDI Practices & Salary Report, as well as these previously unpublished 2010 survey results, is a valuable tool for IT support executives and managers. You can compare your current business performance metrics to the average in your industry or review key performance indicators (KPIs) other markets are leveraging to determine the best metric for your team. These reports will be updated yearly as new data becomes available. 2
3 Table of Contents HDI Industry benchmark report series Page 4 Executive Summary Page 5 Telephone Support: Last Call? Page 6 A Bottleneck in Support Center Operations? Page 7 The Right Tools at the Right Time for the Support Center Page 9 CONCLUSION Page 9 Next Steps Page 9 About HDI 3
4 EXECUTIVE SUMMARY The financial crisis of 2009 has caused companies to reevaluate how they do business. The crisis forced companies to downsize their workforce, to restructure and reconsider how to meet increasing demands at lower costs. The results have been growth and expansion in the outsourcing industry. In January 2010, 56% of respondents to the International Association of Outsourcing Professional s survey to its members said their companies were expanding their outsourcing programs out of necessity for cost-saving and for the increasingly long-term strategic importance for future company growth. Some areas of outsourced services are gaining more momentum than others. According to the recently published study IT Outsourcing Statistics 2009/2010: Outsourcing Trends and Cost Experiences for 11 Key IT Functions by Computer Economics Inc., areas showing the most growth include help desk, desktop support, data center operations and website/e-commerce systems outsourcing. Help desk outsourcing is especially predominant among large organizations. With this growth comes additional responsibility. The Research Roundup: 2010 Service Desk Best Practices Guide, by Gartner Inc., notes that the service desk is no longer just a trouble-ticketing mechanism or a problem-reporting station, but is the governance hub for service and support delivery to the organization. Maintaining this leadership role while continuing to drive down cost requires continuous optimization and ongoing scrutiny of best practices and benchmarks to ensure that outsourcers continue to play a strategic role long into the future. The findings of the HDI data suggest that while KPIs for support centers in the outsourced services sector either meet or exceed averages across all industries, they are still struggling to meet many of the expectations their industry has placed on them. While the outsourced services sector has been a relatively early adopter of new technologies, support centers in this sector show only average adoption rates of more progressive means of providing support, which may be inhibiting their ability to deliver on the growing demands of their global customers. Outsourced services have little option but to continue to improve to meet increasing demands. The HDI survey results show that 77% of outsourcers have seen a greater increase in incidents, compared to 67% of the industry average. The outsourced services sector surpassed the industry average of incidents involving expanded service offerings, 30% vs. 26% respectively. As previously stated, outsourcers beat industry averages in terms of an increase in incidents due to customer growth, at 30% vs. the industry average of 23%. Why most support centers have seen an increase in their number of incidents Outsourced Services % All Industries % Infrastructure or product changes: upgrades, conversions, installations Expanded service offerings by the support center More customers Increased awareness of the support organization 7 5 Lack of customer competency 0 3 Product quality 0 2 4
5 The data also shows that the increase in incidents is due to an increasing awareness of the support center itself. This indicates that, while current outsourced support centers performance is above average, it faces significant pressure in terms of providing cost-effective but world-class support. On average, it is in danger of being outstripped by rapidly escalating requirements. Telephone Support: Last Call? One of the most important metrics for measuring optimal efficiency was first-call and first-contact resolution (FCR). A term borrowed from the customer service call center industry, FCR has migrated into the technical support world. 1 First-Contact Resolution (telephone only in the HDI survey) is a quality metric that strongly impacts customer satisfaction. As FCR rates rise, so will customer satisfaction scores. The HDI survey results show that an overwhelming majority (97%) of outsourced support centers receive incidents by phone. With this in mind, it is encouraging to find that average FCR in outsourced services is 63.8%, which beat the industry average of 65.6%. In addition, target FCRs for outsourced services were met by at least 60% of outsourced service providers, vs. only 51% across industries. The average target FCR in 2010 was 61.6%. These rates merit attention, as an average FCR of 71% is considered low, leading to lower customer satisfaction scores. 2 First-call resolution rate (telephone only) Average First Call Resolution Rate Average Target First Call Resolution Rate % Who Make Their Target Outsourced Services 63.8% 61.6% 60 All Industries 65.6% 61.5% 51 In two related metrics, outsourcers again surpassed industry averages in the category of telephone support: in hitting target rates for average speed to answer, 89% vs. 69%, and the percentage hitting their target abandonment rate, 72% vs. 52%, respectively. Despite outsourcers strong performance in telephone support relative to industry averages, overall FCR remains low. Given that the bar is set high for customer satisfaction, which is inherently tied to FCR, other channels may prove more efficient, productive and cost-effective in the long-term. Percent of support centers who make their Average Speed-to-Answer Target Outsourced Services 89% All Industries 69% Percent of support centers who make their Abandonment Rate Target Outsourced Services 72% All Industries 52% HDI Practices & Salary Report. 2 Zbikowski, Erik. The Essential Call Center KPIs, Customer Management Insight. 17 April
6 A Bottleneck on the Virtual Highway The overwhelming majority of outsourcers (95%) have established as a support channel. Similar to telephone support, there is a correlation between response time and customer experience. In outsourced services, 53% of support centers responded to in under an hour, compared to 42% across industries, but the two have equal averages in responding to in 15 minutes or less, at 11%. Average time for an agent to respond to a customer about and incident reported through < 15 min 15 min to 1 hour 1 to 4 hours 4 to 8 hours 8+ hours Total Outsourced Services 11% 42% 34% 11% 3% 100% All Industries 11% 31% 36% 13% 9% 100% Taken as a whole, the data suggests that outsourcers respond to incidents via in a relatively timely manner. However, the HDI data also shows that several exchanges (where one exchange equals one receive plus one send) may be required to resolve an issue through , taking away from the productivity advantages that support promises at first glance. Fifty-one percent of incidents received by require two exchanges, and 31% require three exchanges. Only 11% are resolved in the first exchange. In this category, outsourcers fall short of the industry averages. This begs the question, in an economic climate devoted to worker up-time and efficiency, of whether clients will continue to find this lag in time-to-resolution acceptable. Average number of exchanges it takes to resolve an incident via (1 exchange = 1 receive + send) Outsourced Services % All Industries % More than as a support channel does not always function on its own. Instead, a large percentage of incidents initiated through end up escalating to telephone support. Outsourced services fell short of the industry average: only 15% of outsourced services convert less than 10% of incidents to phone for resolution, compared to 25% across all sectors. Another issue this data reveals is the trade-off between number of exchanges and escalation to phone. For outsourced support centers, the inclination appears to be toward a greater number of exchanges rather than escalation to phone. Since, as will be discussed later, is less expensive per incident than phone, this may be financially driven. Regardless of how the incident is finally resolved, the fundamental question is whether adding as the first step in a two-step process lengthens or shortens the overall support process for these support centers. 6
7 Percent of incidents reported through converted to telephone support before being resolved Outsourced Services % All Industries % Less than 10% % - 20% % - 30% % - 40% % - 50% % - 60% % - 70% % - 80% % - 90% % - 100% 6 7 The Right Tools at the Right Time for the Support Center Support centers across all industries recognize the vital role that technology plays in reducing support costs as well as delivering world-class service. The HDI data indicates that outsourced services recognize the importance of staying ahead of the technology curve. When asked by the HDI survey what tools are essential to an effective support center, a clear discrepancy emerged between actual use and perceived optimal use. For instance, while 56.4% of respondents in outsourced services considered online chat an essential component of an effective support center (compared to an industry average of only 42.9%), 62% of outsourced services were not using online chat. Similar discrepancies held across other tool categories as well, such as self-help tools and customer satisfaction tools, demonstrating that outsourced services strongly believe that there are still gains to be made through the use of technology. An effective support organization must have this tool (Percent who agree) Outsourced Services % All Industries % Incident Management Software Customer Satisfaction Tool Knowledge Management Software Remote Monitoring/Support Tools Self-help Tools Online Chat
8 Percent of Support Centers NOT Currently Using These Tools Incident Management Software Remote Monitoring/Support Tools Customer Satisfaction Tool Knowledge Management Software Self-help Tools Online Chat 9% 8% 15% 10% 18% 8% 31% 33% 51% 44% 68% 62% All Industries Outsourced Services The data also highlights opportunities to leverage new solutions that will equip Outsourcers to compete globally while continuing to achieve optimal, yet cost-effective support. As previously stated, online chat is not used by 62% of Outsourced support centers, but it may offer the lowest fully burdened cost per incident. Averages across all industries suggest that median per-incident cost with chat is approximately three-quarters that of phone incidents and equal to the costs of incidents. Another potential opportunity is the convergence of online chat with remote support and monitoring tools. The HDI data suggests that these two technologies are being used separately, but current solutions combine these two channels in a way that enables seamless escalation from chat into remote diagnostics and remote support. CASE STUDY CSC, one of the world s largest technology services firms, implemented Bomgar s remote support solution in three major support centers. Bomgar s ability to support multiple platforms, its strong service desk and security features, and its ability to keep the user in complete control at all times are driving improved productivity and efficiency at the CSC service desk. Bomgar s impact on the CSC service desk has been extremely positive. Calls that were once escalated to higher, more expensive support tiers are now handled in lower, more economical tiers. Clients previously unable to receive remote support due to privacy and security concerns can now connect with confidence. These capabilities continue to reduce support costs and improve client satisfaction numbers. 8
9 CONCLUSION The information in the 2010 HDI Practices & Salary Report, along with this supplemental data, indicates that while outsourcers outperform their peers in many measurements, they have great potential for leadership and innovation due to the changing nature of the market. By exposing the current challenges in support, the data also reveals opportunities for optimization, preparing the support organization for the imminent demands of tomorrow and beyond. Are you prepared? NEXT STEPS If you are interested in learning more about how support centers in outsourced services and other industries have been able to improve their core metrics, improve customer satisfaction and reduce support costs, please contact Bomgar to see if you qualify for an individualized value assessment for your organization. For more information, call or visit our website at About HDI HDI is a global IT service and technical support membership association and the industry s premier certification and training body. Guided by an international panel of industry experts and practitioners, HDI is the leading resource for IT service and technical support emerging trends and best practices. HDI provides members with a vast repository of resources, networking opportunities and the largest industry event, the HDI Annual Conference & Expo. Headquartered in Colorado Springs, CO, HDI offers training in multiple languages and countries. For more information, visit or call Specifications are subject to change without notice Bomgar Corporation. All rights reserved. Bomgar and the Bomgar logo are registered trademarks of Bomgar Corporation. All other brands and products referenced herein are acknowledged to be trademarks or registered trademarks of their respective owners. HDI is a registered trademark of United Business Media LLC. HDI is part of UBM TechWeb, a division of United Business Media LLC. 9
10 ABOUT BOMGAR Bomgar is the worldwide leader in secure, appliance-based remote support solutions. The company s award-winning solutions enable organizations to improve IT support efficiency by securely accessing and managing virtually any system Windows, Mac, Linux, BlackBerry, Android, the iphone, ipad and most versions of Windows Mobile, regardless of their location. More than 5,500 companies around the world have deployed Bomgar s enterprise-class solutions to rapidly transform their IT support functions and significantly improve operational efficiency and customer satisfaction while dramatically reducing costs. Bomgar is privately-held with offices in Jackson, Atlanta, San Francisco, Washington D.C., Paris and London. In 2010, Bomgar was named one of the fastest-growing technology companies in America by Deloitte. Contact Bomgar info@bomgar.com Bomgar Corporation Corporate Headquarters 578 Highland Colony Parkway Paragon Centre, Suite 300 Ridgeland, Mississippi Atlanta Johns Creek Parkway Suite 200 Johns Creek, GA San Francisco 1686 Union Street Suite 212 San Francisco, CA Paris Avenue Hoche Paris France 33.(0) EMEA Headquarters Oakridge House Wellington Road High Wycombe HP12 3PR United Kingdom 44 (0) Washington D.C Freedom Drive Two Fountain Square, Suite 588 Reston, VA Bomgar Corporation. All Rights Reserved bomgar.com
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