The FT Word

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Welcome

Welcome to the October 2008 edition of the FT Word. Please forward it to your colleagues. (They can get their own subscription by clicking here.)

This month’s topics:

Creating a staffing model for support – the second installment in our series of articles about strategic planning for support organizations
Sharing offices – can managers do it?
Budget Magic – all you need to create your customized support budget

Creating a Staffing Model for Support

Last month we discussed strategy for support organizations (see here and here.) This month we take the discussion to the next logical point: creating a support budget. Since the bulk of support expenses lie with headcount, the main challenge is to appropriately model staffing.

There are many ways to create staffing models for support – I mean other than dividing the available budget by the cost of one headcount. While high-volume, phone-oriented support organizations should learn to love their Erlang C formulas, most low-volume, high-complexity support centers can use much simpler models and still get wonderful results. Actually my experience is that is that many support organizations over-engineer their staffing models, building complicated spreadsheets that require a full-time tender and yield slow results that are not very accurate. So why not embrace a streamlined approach to creating staffing models that can be reused over and over again and improved simply by collecting metrics over time?

Here’s how?

1. Confirm the case resolution model you use. For most support organizations the bulk of the headcount is determined by what’s needed for support delivery so you will need to start there. Do you use a tiered model? A Touch and Hold model? The case resolution model will dictate how you forecast headcount.

2. Collect existing metrics. The best (i.e. easiest and most accurate) method to create a staffing model is by using your current experience. Even if you are creating the model to plan for a new product line it’s a good idea to start from your current reality. You will need: current incoming case volume, average effort time to resolution (by tier if you use a tiered model), and the utilization ratio for staff members, that is how many hours per day are available to work cases, excluding time off and time devoted to other tasks. If metrics are not available from your case-tracking system conduct a small-scale data gathering exercise. Ask a few staffers to keep track of their time for a few days: even a small-scale test yields surprisingly accurate results.

3. Estimate future volume. The easiest way to do that is to use sales forecasts and match the increases, although you should see a slight decrease in the incident rate as your customer base grows. In other words, if today your average customer logs 10 cases a year next year the incident rate may decline slightly to perhaps 9.8. (Did the incident rate decline between last year and now? That would be a good clue.) If your volume is driven more by new releases than by the size of the customer base you can forecast volume based on the release schedule instead. In my experience a customer base-driven approach is usually better for forecasting headcount while the new release schedule is useful when it gets to scheduling.

The formula is simply:

Case volume = # customers * incident rate

4. Calculate the support engineers’ headcount. The math is straightforward. To find the headcount required, simply calculate

Headcount = volume * effort time / available time

If you use a tiered model, you will want to then estimate the number of cases escalated to tier 2 (using current experience as a guide) and repeat the computation for Tier 2 staffing. If you use a Touch and Hold model you can compute Backline headcount as a percentage of the Frontline.

If you support separate product lines that are staffed separately, you will need to apply the same calculations to each product line. If you use generalists that support multiple product lines there’s no need to do that; just put everyone in the same bucket. The same is true for multilingual support.

5. Add other categories of staff. I like to base the staffing levels for all categories of personnel on the delivery headcount. This means establishing reasonable ratios of non-delivery operations. 5-10% would be a good level for large, complex-support organizations. So if you have 100 support engineers you can afford 5-10 headcount to handle the planning, tool management, knowledge management administration, etc. Finally, add managers by applying a 1:10 ratio, perhaps a tad higher.

6. Refine the model. If you must provide 24×7 support or you have a small team you will want to massage the numbers so you have enough coverage. For instance it’s a good idea to dictate a minimum of 2 people per shifts, or at least 6 people overall to cover a 24×7 operation.

7. Face reality. Now that you have a formal model, how does the current organization stack up? It’s not unusual at this point to expose anomalies: some functions are overstaffed, others perhaps severely understaffed. If there’s a good reason for the discrepancy, adjust the model to match reality. If there’s a temporary need for extra staff in one area, there’s no need to adjust the model per se but plan to revert to “normal” as soon as feasible.

8. Don’t overreach. The staffing model should give you a clear forecast of staff needed to do the job. It will not resolve all personnel issues such as turnover .

9. Review and revise regularly. Staffing models are just that, models. They need to be adjusted at least quarterly at the beginning, then at least every 6 months. Be disciplined: keep the model as streamlined as possible throughout its life and resist the temptation to add more special cases as you go forward. Very large organizations enjoy successful forecasting with very simple models (just 3 numbers: incoming volume, effort time, available time – and the last 2 don’t change much.) If they can do it, so can you.

If you’d like to expedite building your own staffing model try our ready-to-use, customizable template. All you need to do is supply your own metrics and the spreadsheet will auto-magically (to quote one of my favorite customers) compute the required headcount – and even compute your entire expense and revenue numbers. What’s more, you can reuse the templates over and over again: just adjust the assumptions and create a revised budget. For more information click here.

Sharing Offices – Can managers do it?

Thanks to Jesse Tripp for suggesting this topic.

Newsflash: how the work environment is configured influences productivity, teamwork, and employee satisfaction. I happen to type these words in a quiet office equipped with a door, a pleasant garden view, an operable window, and a creaky office chair. It does wonder for my concentration, if not for my back. What can your office space do for you?

1. Most support centers are constrained by the environment chosen by the corporation they belong to. Here in Silicon Valley this typically means cubes for the masses and private offices for the managers, with frequent exceptions. Think twice before deviating from your corporate standard: it may be impractical (What if you need to move or expand the support center? Will you be stuck in your custom-designed space?) and it may also, not so subtly, signal to the other groups in the company that support is, indeed, different and perhaps inferior. That being said, if you strongly feel that a different arrangement than the standard one will boost productivity and you can make it happen, go for it.

2. Open-plan offices have their benefits, in particular better sharing of information. This is true for managers as well as staff members. A manager in a private office must plan to walk around each day to get a feel for what’s going on. A manager in an open-plan office can simply sit and open his or her ears.

3. There are many flavors of open-plan offices. For instance, many European offices simply offer a large room with desks or even one large shared desk (no cubicles). Contrast that with low cubicle walls, high cubicle walls, and even cubes with doors (open-ceiling.) The phonic insulation of cheaply-made offices can also make for not-so-private offices. I remember sharing a wall and a window with a coworker in the next office and being able to hear every phone conversation he had, especially when his door was closed (he did have a booming voice, to be fair!)

4. Offer small conference rooms in open-plan offices. They don’t need to be large but there should be enough so that anyone who needs to make a private phone call, grab some undisturbed time, or hold a short private meeting can grab one without having to make a reservation or take a hike across the building.

5. Private offices and higher walls foster concentration and privacy. This is a boost for individuals who need peace and quiet to do their work, anyone who needs long periods of focus, and managers who need to conduct performance-management activities that require confidentiality. They can also get in the way of working together, a staple of support activities. Managers who choose to hide in their offices miss out on the action.

6. Sharing an office is more intimate than working in an open-plan office. With just one roommate it’s difficult not to eavesdrop on calls and other interactions, even more than with a cubicle environment that affords a modicum of noise privacy compared to the hard wall of a confined environment. Shared offices may be the most awkward of arrangements.

7. Open-plan does not mean egalitarian. Cubicle-only environments typically have strict rules on the exact square footage (and wall heights) allowable at each level of the hierarchy. You can be sure that the higher-ups will have the most desirable cubes, larger than others, with a view to the outside, shaded from the afternoon sun, and far removed from the bathroom and the noisy printer area.

8. If offices are rare consider using them as conference rooms. Place everyone in a cubicle and encourage managers to pop into a conference room throughout the day as needed for confidential (or simply noisy) discussions. The benefit is that managers who tend to hide out in their offices can no longer do that!

9. If you can, match the environment to the process. For instance if you use a Touch-and-Hold process where the Backline engineers must mentor others it may make sense to give them an office so discussions can take place close to the working environment but behind a closed door if they are noisy. Or if your support center is call-intensive you may find that regular cubicle walls create an unacceptable level of noise (note that what matters most when it comes to noise is the quality of the partitions and not their height: low, high-quality walls work better than high, low-quality walls.)

10. Remember the interfaces with other teams. Support processes don’t stop within the Support organization. If you routinely need to consult the Engineering team can you arrange to be close to them – even if this means making other compromises?

If I had my druthers I would give people managers individual offices so they can easily hold the private conversations they need to hold with maximum efficiency. Barring that, I would prefer using the offices as conference rooms to having managers share them. Tell me what has worked for you.

FT Works in the News

Introducing Budget Magic, the latest FT Works booklet, this one complete with a slew of Excel spreadsheets preloaded with all the formulas you need to spit out budget numbers – but ready to populate with your customized assumptions, which you can change at any time. There are scenarios for all kinds of support organizations, regardless of the resolution model you use and whether you operate as a P&L or a cost center. More details and ordering information here.

I worked with Lithium, a wonderful Communities-On-Demand vendor, to create a ROI tool for communities (aka customer forums). After validating the tool with several of their clients we found some wonderful payback for community projects, especially with larger customer bases. You can get the white paper, Gold in Them Hills, at http://www.lithium.com/sspafl0911a/.

Curious about something? Send me your suggestions for topics and your name will appear in future newsletters. I’m thinking of doing a compilation of “tips and tricks about support metrics” in the coming months so if you have favorites, horror stories, or questions about metrics, please don’t be shy.

Regards,
Françoise Tourniaire
FT Works
www.ftworks.com
650 559 9826

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