axios service catalog roi

Document Sample
axios service catalog roi Powered By Docstoc
					Axios Systems
Service Catalog ROI Calculator
This tool helps to calculate potential savings and benefits that can be achieved from Service Catalog implementation. The implementation for an
automated Service Catalog system provides an opportunity for IT departments to demonstrate their value and manage and optimize IT Services.
Automation of request management and delivery processes also offers opportunities to reduce lead times and costs, simply through the reduction
in human interactions, touch points and approval processes and the removal of bottlenecks and delays through the pre-approval of some standard
requests.

Focus of tool
This ROI calculator focuses on 3 main areas:
   Reduction in cost of delivery and unproductive time for requests (standard)
   Reduction in cost of delivery and unproductive time for requests (non-standard)
   Reduction in Service Desk costs associated with request handling
Instructions:
  1) Read "Typical Benefits" worksheet for background information on how Service Catalogs can reduce costs, increase quality and efficiency of service, and improve
  IT's relationship and communication with the business.
  2) Simply enter your current values in the 'Your costs' worksheet in yellow cells D7 - D19. Enter your expected savings in yellow cells F7 - F19.
  3) Enter expected project costs on "ROI" worksheet in yellow cells D23:F26. Review summary of expect ROI for project at tab of worksheet.

  A note on value inputs: You will need to enter some basic details (i.e. number of requests). However, if you don’t have all this information, you can use some of
  our 'standard' values - (i.e. loaded staff costs). You can also enter expected reductions in each area - shown as a % reduction in cells F5 - F15 on the "Your costs"
  worksheet. Again, we show standard expectations and you can add your specific value based on process re-engineering and expectations of efficiency
  improvements.
Typical Benefits from Service Catalog projects
Cost Reduction
Reduced Cost of a ‘standard’ request – 20%-40 %
  Removing administrative bottlenecks, unproductive time and administrative headcount
Reduced Cost per non-standard request – 20% – 40%
  Removing administrative bottlenecks, unproductive time and administrative headcount
Reduced/eliminate cost of manual errors and re-work
  Remove the chasing and reworking that characterizes so much of IT operations, caused by inefficient error-prone manual processes
Reduced impact on the Service Desk calls for requests and chasing
  Many Service Desks now spend a large % of their telephone time taking requests – automation frees up their resources for support or reduces the needs for
  administrative staff to take these calls
Optimized procurement costs through Demand Management and reporting
  Managing procurement and demand by ‘Service’ provides the IT organization to monitor demand across their customer base and make appropriate savings
  and avoid unnecessary overspend
Quality and Efficiency
Improve delivery time for ‘standard requests
  Automation and configuration means that the process, approvers and authorization of ‘standard’ requests is pre-defined and therefore the actual delivery
  time will be reduced to remove all bottlenecks and blocks.
Improve delivery time for non-standard requests
  This may involve a different process from ‘standard’ and still require bespoke and senior intervention, however automation will still speed up and formalize
  the process
Reduce administration and intervention for standard requests
  As well as cost reduction there is also less interruption to key staff for (particularly) standard approvals, chasing and tracking.
Opportunity to charge and recover Service costs
  Automation of the ‘service view’ provides the opportunity to charge-back services at service (e.g. Email ) or offering (e.g. create account) level. ‘Bundled’
  services can be charged out to specific customer groups and also include monitoring and use-based costing and charging.
Improved availability (24x7) for logging and tracking requests
  IT can offer its service portal at any time and from potentially any location so this is particularly useful in global organizations
Capability to increase request workload without impact on resources
  The system will be able to absorb a large amount of new standard requests and services – at the same service levels - without the need for more
  administrative staff
Capability to manage non-IT processes
  A service request portal can be used for literally any type of service, so the IT organization can offer this capability to other departments – this can be useful
  if this work already sits with the Service Desk and impacts on its IT work
Opportunity to recover / share some costs with other non-IT departments for requests
  This is an opportunity to reduce and share the operational cost to IT of request management, plus also providing revenue-earning opportunities
Opportunity to resolve cross-department issues with supply chain management & reporting
  Most IT organizations depend on other departments to deliver part of their service ‘supply chain’ – e.g. finance, HR approvals – By managing this as end-to-
  end services and identifying individual sub-tasks and ownership it is simple and transparent to identify where problems lie.
Opportunity to manage IT Services ‘end-to-end’ and monitor Service Availability
  This is the chance for IT departments to act more like businesses and deliver and monitor their bundled services as complete packages rather then IT
  components. Reporting to the customer is more focused on their experience and requirements and is also couched in more user-friendly terms.
Opportunity to charge IT Services end-to-end
  From a financial perspective the bundled services can be costed and charged back in full or in part. Demand can also be tracked and controlled.
Opportunity to manage multi-tenancy services and SLAs
  Organizations such as Managed Service Providers, or simply IT organizations with multiple autonomous customer groups, can manage, charge and control
  their various customer groups and services separately, independently and securely.
Relationship/Communications
Improved Customer satisfaction ratings
  The interfaces and communications between IT and its customers are greatly improved, plus customers are usually delighted to have faster and more
  predictable turnaround times.
Improved image and engagement between IT and the business
  Reporting and feedback between IT and its customers becomes highly tailored such that customers start to get information that is relevant and appropriate
  to them. This helps to engender improved relationships and understanding between the parties.
Improved transparency of IT processes
  Transparency helps to get issues resolved and also reduces time wasted through misunderstandings. IT can also focus clearly and demonstrably on business
  priorities
Your Costs - Input
INPUT QUESTIONS                                                                                  Current            Service Catalog
                                                                                                                     Expectations        %
How many standard requests do you process per month?                                               2000
What is the average number of human interventions per request?                                       5                 Reduce by         40
What is the average intervention time in hours per request per staff member?                         1                 Reduce by         30
What is the average elapsed time in hours to deliver a standard request?                            50                 Reduce by         30
What is your loaded hourly cost per IT staff member? *                                              65
How many non-standard requests do you process per month?                                            100
What is the average number of human interventions per request?                                      10                 Reduce by         30
What is the average intervention time per request per staff member?                                  2                 Reduce by         40
What is the average elapsed time in hours to deliver a non-standard request?                        150                Reduce by         30
How many users do you support?                                                                     10000
What is the average number of requests logged per user per year?                                     4
What is the average intervention time per request per hour per Service Desk staff member?           0.2                Reduce by         40
What is the calculated cost per hour of user unproductive time? **                                   5


                                                                                                                                                         %
Current Cost & Expected Savings Calculations                                                    Current               Expected                 Savings Saving
Cost per standard request
  Number of human interactions as an average per request                                             5                      3
  Average time per intervention per IT staff member (hours)                                          1                     0.7
  Loaded hourly cost for IT staff                                                                   65                     65
  Number of standard requests processed per month                                                  2000                   2000
Total Intervention cost per year                                                                  650000                273000                  377000   58
  Average elapsed time in hours to deliver a standard request                                       50                     35
  Total Elapsed time hours                                                                        100000                 70000
  Cost per hour of unproductive time                                                                 5                      5
Total cost of unproductive time                                                                   500000                350000                  150000   30
TOTAL                                                                                                                                           527000

Cost per non-standard request
  Number of human interactions as an average per request                                             10                    7
  Average time per intervention per IT staff member (hours)                                           2                   1.2
  Number of non-standard requests processed per month                                               100                   100
Total Intervention cost per year                                                                  130000                 54600                   75400   58
  Average elapsed time in hours to deliver a non-standard request                                   150                   105
  Total Elapsed time hours                                                                         15000                 10500
  Cost per hour of unproductive time                                                                  5                    5
Total cost of unproductive time                                                                    75000                 52500                   22500   30
TOTAL                                                                                                                                            97900

Service Desk cost of handling requests
  Number of users supported                                                                        10,000                10,000
  Requests logged per customer per year                                                               4                     4
  Service Desk time spent per request - hours                                                        0.2                  0.12
TOTAL SERVICE DESK ANNUAL COST                                                                    520000                312000                  208000   40

TOTAL COSTS & SAVINGS                                                                           1875000                1042100                 832900    44


Calculation assumptions:
Cost per standard request
Total Intervention cost per year:
  No. of human interactions x average time per interaction x no. of requests x loaded staff
  cost
Cost of unproductive time:
  No. of requests X elapsed delivery time x cost per (user) unproductive time
Cost per non standard request
Total Intervention cost per year:
  No. of human interactions X average time per interaction x no. of requests x loaded staff
  cost
Cost of unproductive time:
  No. of requests X elapsed delivery time x cost per (user) unproductive time
Service Desk Cost of handling requests
Service desk annual costs:
  No. of users x requests per year x Service Desk staff time per request x loaded staff cost

* $65 per hour is a conservatively loaded cost based on average IT employee per hour cost as reported by the US. Bureau of Labor Statistics in 2007.

** This would be an estimate of the cost to the business of user unavailability - shown at nominal $5
ROI Calculation

Summary of Expected Savings &
Project Costs                                     Year 1          Year 2         Year 3          Total         Annualized        NPV *

Savings Expected                                      0          416,450         832,900       1,249,350          416,450

Project Costs                                     100,000         70,000         60,000         230,000           76,667

Net Cost/Benefit                                  -100,000       346,450         772,900       1,019,350          339,783        18%



Savings
  Reduced cost per standard request                  527,000
  Reduced cost per non-standard request               97,900
  Reduce Service Desk cost                           208,000
TOTAL SAVINGS PA                                    832,900

Current Operating cost estimate                   1,875,000

Project Costs**                                    Year 1         Year 2          Year 3
  Software and Licenses                              50,000                0             0
  Maintenance and support                                 0           50,000        50,000
  Implementation Consultancy                         30,000           10,000         5,000
  Training                                           20,000           10,000         5,000
  Internal resources
TOTAL                                               100,000           70,000        60,000

* NPV = Net present Value is expressed as a annualized % of current cost
** These project costs depend on the size and complexity of organization. Pre-populated costs shown for illustration purposes.

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:41
posted:9/14/2012
language:English
pages:4