A provider of managed IT and communications services had recently launched several new product offerings, each introducing new complexities into the service delivery process. The client was experiencing difficulty quantifying the effects of these new complexities on their staffing plan and on the effectiveness and efficiency of their service delivery processes.
Client executives suspected that increasing demand forecasts for new, complex products coupled with a steady demand for the current product set would result in staffing shortfall. They suspected that some of the predicted shortfall could be mitigated through savings related to process improvement alternate sourcing arrangements, but lacked facts on which process areas would yield the most opportunity. Jabian was engaged to assist with a solution to address these concerns.
In concert with the client team, Jabian led an end-to-end assessment of the client’s service delivery process, constructed an activity-based cost model to enable the client to analyze relative cost of service delivery effort by product offering, and identified opportunities for process optimization.
Working closely with the client team members, Jabian produced a plan to:
- Observe and elicit estimated times for all service delivery activities,
- Identify and categorize key drivers of variance in activity times,
- Apply labor cost and effectiveness formulas to learn cost per unit of each activity,
- Model common product scenarios as the sum of activity effort time, and cost of role performing the activity, and
- Apply actual and forecast volume to product scenarios to model forecast demand and cost of effort for labor planning and key variance drivers.
The model enabled the client to quickly articulate differences in cost, effort, and complexity between products. This information allowed the client to:
- Formulate a plan to optimize headcount based on forecast demand,
- Plan process improvement initiatives to realize targeted savings, and
- identify candidate activities for alternate sourcing arrangements.