03009 Cutting the Cost of Services and Support

Most experienced accountants will tell you that if you want to improve your company’s financial situation, you get the fastest success by cutting costs as opposed to trying to increase revenues. It’s a sure thing to take money you have today but would spend and keep it in your pocket, rather than aim for a goal of making more money that may never materialize.

The same holds true for improving the financial position of your software product. If you want better profitability next quarter, rather than next year, look at building in functionality that cuts costs.

Not that you ever want to stop adding enhancements that will make your product sell better. But when you reap the financial rewards for more competitive features no sooner than a year from now, you also need to focus on adding features that cut costs.

Use the tips below to find ways to change your product so that your company saves money.


There Are Lots of Hidden Costs

Most companies have lots of hidden costs in their operations, inefficiencies and time-consuming tasks that require rote human effort to complete. Because so often they involve the work done within a single department, they don’t get visibility with other departments, such as Marketing, Product Management, or Development, where people can take it upon themselves to remedy their rote tasks by requesting changes to the software.

These productivity killers are not sexy, but they’re important. They are prime candidates for cutting costs quickly to make the product (or company) more profitable.

But because these problems often fly under the radar, you need to do a little digging to find them, because the few people who complained about them have given up on being vocal about it. After that you’ll probably need to sell management on fixing them by changing the software. It may never occur to busy managers that changes to the software could solve problems they have come to see as necessary evils.

Talk to Customer Care

If there’s ever a department that has lots of suggestions for how to fix the software, it’s Customer Care or Support. However, when you talk to department members (and their manager), you are looking for a specific type of problem.

Work with Customer Care to draw up a list of the four or five most common problems. If you have call tracking software, you might be able to get this from a report.

Otherwise, it’s a matter of polling a number of people until you can see a pattern, and putting together estimates in terms of number of calls or percentage of time spent.

Take a look at these common problems and brainstorm about whether there is anything that can be done to make the customer care process go more smoothly. For example, there may be a certain problem that frequently occurs where a systems person is required to dial into the customer’s system to search a specific log file. That means someone first logs the call, then someone else arranges to dial in and reviews the log file and determines the problem. Then you call the customer and tell them what corrective action to take.

This is the perfect candidate for a new requirement. It’s probably too complex to try to have the software analyze the contents of the log to diagnose the problem and send an error message with the corrective action.

But it’s a simple change to create a menu option or a button that takes the data from the most recent day and prompts a user, while they’re still on the initial hotline call, to save a file that they can attach to an email. You might even be able to automate the creation of the email with attachment. This will cut significant time off the resolution of problems involving the log file.

The costs savings comes not from eliminating a common problem, but from streamlining the process required to resolve it each time it occurs.

Review the Installation Process

If there’s one function that requires highly technical, highly trained staff to spend way too much time on routine tasks, it’s software installation.

Installation for anything other than shrink-wrapped mass consumer software is usually a complex business. It may require setup of environment variables and installation of software applications (like database or communication software) in addition to your product. The more you can automate this process, the more time your company will save.

There is the potential to transform the installation efforts at your company if you not only automate as much of the process as possible, but build a setup where you can install the software remotely using secure connections. Even if initial installations require on-site time, upgrades can often be automated.

For client/server systems, automating both the server and client installation also becomes a major selling point: ease of deployment and support by your customer’s IT staff. Providing automated client installs, perhaps directly through the user interface, will also save trainers time when they have to set up an environment for on-site training.

Parameterize Customizations

Meet with installation and development staff to identify areas of frequent customization that could be turned into options that are built into the software and triggered using parameters.

For example, a noticeable percentage of new customers are requesting that administrators have permission to reset user passwords, but don’t have access to any information in those records, while your standard software lets an admin user review and change user information.

One way around the customization time (and the ongoing maintenance time that this entails) is to add both versions of functionality to the standard software, and activate one or the other using a parameter set during installation.

This kind of change continues to save maintenance time with each upgrade of customized software.

Automate Implementation Steps

Software customers in today’s market are looking to the software maker to provide ever shorter and simpler implementations, and software companies are touting short deployments in order to win business.

One simple way to automate steps for setting up maintenance files such as users, customers, parts, and warehouses is to let your consultants, or staff at the customer, enter this information into a single spreadsheet, then import the spreadsheet (or a comma delimited file resulting from it) during the installation process.

By allowing information to be entered into a spreadsheet in Excel or Lotus, you open the way to having less expert employees do more of the work.

Another way to automate this is to create a data entry process, in the standard user interface, that copies users and customers from templates. However, such a change already involves significant software coding.

Automate Import and Export

This is a version of the previous tip, only applied to sets of information that change regularly.

Discuss with the teams for customer care, installation, and implementation whether there are areas where they are frequently working to import and export data. For example, your application may make use of shipping rates that are calculated from raw information in a rate file. The rates need to be loaded as part of each installation, plus the rates change regularly and this leads to support calls.

Set up this feature so that rates can be entered by a non-technical user in a spreadsheet, then saved as a delimited file and imported using a button in the user interface. The new capability cuts the number of hotline calls as well as the technical expertise and amount of time needed to resolve them.

How Do You Save When These Costs Are Cut?

The final challenge, after making improvements that cut demand on services and support employees, is to change work assignments so that you benefit from the newly freed up resources. And then, most important of all, to measure and report on the savings.

You will get the most benefit from employee time savings if you can be flexible about reassigning tasks between different resources and different departments.

For example, by freeing up the support hotline workload, you can choose not to hire new customer care reps as the customer base expands. Or you can offload duties performed by more highly paid technical staff onto customer care reps.

Another measurement for cost cutting is decreased attrition (due to less frustration for customer care reps, installers, and trainers), which you can measure and assign a dollar value to by estimating savings in recruiting expenses and salary paid before new employees are productive.

It probably takes six months of workload improvements before you can begin to assess the impact on attrition.

Measure any cutback in software engineer time spent assisting support, training, installation, and implementation. Finance can provide a fully loaded hourly dollar cost for developer time.

Finally, savings in installer time can be dramatic if you significantly cut on-site visits. Installers often have technical skills that make them valuable for a variety of critical tasks, including support, QA testing, implementation, and development.

— Jacques Murphy, Product Management Challenges


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