Drive Long-Term Savings Through Cost-Per-Ticket Analysis

Drive Long-Term Savings Through Cost-Per-Ticket Analysis

COST-PER-TICKET CASE STUDY

Drive Long-Term Savings Through Cost-Per-Ticket Analysis

OVERVIEW

When it comes to assessing an FM Program, we have discovered that cost-per-ticket KPIs set a better tone in measuring long-term savings. We all have had our fair share of standard metrics: response times, length of calls, resolution timeframes, and overall customer and project satisfaction rates, but regardless, there is one service metric that rules them all: cost-per-ticket. The difference between evaluating a service program from the perspective of the average cost-per-ticket (versus the hourly-rate charge), may be the biggest difference between providing savings, versus consistently going over budget month after month.

 

THE DIFFERENCE BETWEEN EVALUATING A SERVICE PROGRAM FROM THE PERSPECTIVE OF THE AVERAGE COST-PER-TICKET (VERSUS THE HOURLY-RATE CHARGE), MAY BE THE BIGGEST DIFFERENCE BETWEEN PROVIDING SAVINGS, VERSUS CONSISTENTLY GOING OVER BUDGET MONTH AFTER MONTH.

APPROACH

ASSESS

During the RFP stage, some suppliers have learned to submit lower hourly rates to ensure they win the work, but then drive up your costs by performing the work through inflated hours and by creating unnecessary exorbitant markups on materials. For example, a client recently moved their maintenance program over to us from another company, due to their former providers constantly exceeding their budgeted maintenance spend – even though their hourly rates were very low.

Our advantage merges scoping the issue out appropriately while leveraging an industry-recognized best-in-class triage process – along with providing clearly defined SLAs (Service-Level-Agreements), which define our goals for driving down costs, and thus, holding us to an expectation on a cost-per-ticket by trade category. Overall, we maneuvered the down costs in the first year by 24%, even while our own hourly rates were 6% higher than the previous company.

 

OUR ADVANTAGE MERGES SCOPING THE ISSUE OUT APPROPRIATELY, WHILE LEVERAGING AN INDUSTRY RECOGNIZED BEST-IN-CLASS TRIAGE PROCESS – ALONG WITH PROVIDING CLEARLY DEFINED SLAS (SERVICE-LEVEL-AGREEMENTS), WHICH DEFINE OUR GOALS FOR DRIVING DOWN COSTS, AND THUS, HOLDING US TO AN EXPECTATION ON A COST-PER-TICKET BY TRADE CATEGORY.

WORKFLOW

When we discuss at length how critical it is to measure your cost-per-ticket by category, what we are conveying is the important perspective of lessening the focus on the rate-per-hour. Previously, we have mentioned hourly rates are at times manipulated, and furthermore, are more than less likely to be the cheaper option for long-term maintenance strategies.

Our hourly-service rates are set at a high-base point, coming in about 9%-more than what may be ideal for the typical “run-and-fail” model tactician, but we not only deliver a first year reduction, but by the second year we typically see additional savings through strategic purchasing and better refined SLA’s. How this is accomplished is through our proprietary workflow protocols by scoping the issue precisely, streamlining purchasing materials and to mitigate non-emergency travel expenses that can be held off for another day or two.

TRIAGE PROCESS

In any customer service-based industry there are two fundamental metrics: customer satisfaction and cost-per-ticket. Customer satisfaction is usually subjective in nature, while cost-per-ticket is quite objective. Typically, other factoring KPIs (Key Performing Metrics) tend to apply to other forms of cost containment qualities. Cost-per-ticket implementations usually illustrate a situation involving spending a lot of money per ticket, but the resulting customer satisfaction is terrible. You will want to examine why so much money is being spent, which are the bones in driving down costs.

 Triage Processes help eliminate or alleviate costly tensions during the overall repair project by always providing you with good, better, and best solutions and materials for each task. For example, as mentioned briefly before, our triage pushes out non-emergency repairs to the next day, which will reduce trip costs and overtime rates, while downgrading more than 22% of emergency calls through our custom triage process.

RESULTS

ASSESS

Driving yearly cost-per-ticket savings by 15% or more

WORKFLOW

Streamlined workflow saves on average close to 20% within 2-years

TRIAGE PROCESS

Triage processes can reduce trip costs and work overtime rates by more than 22%

There are plenty of additional variables that impact the total cost of a service. Highlighting some of the cost-fueled “blind spots” requires analyzing and quantifying additional factors: overhead and costs associated with each work order, like purchasing merchandise, and the direct labor cost of the ticket. Without properly evaluating any indirect or direct costs upfront, you lose transparency in calculating the financial impact this will have on your business and the impact it will have on the longevity of maintaining your space.