Total Cost Of Ownership (TCO)

Published by Jeff Medley on

TCO, Total Cost of Ownership. Concept with keywords, letters and icons. Flat vector illustration on white background.

The More Netfor Services Clients, The More They Save And Grow

Netfor’s relationship with new service desk clients often follows a curious path. Initially, they’ll outsource their IT help desk or call center operations to us, tasking us to handle calls for the most common issues users encounter, while escalating calls for other issues to their internal staff. After working with us for a month or two, they become satisfied and comfortable with the work we perform.

As we begin to notice patterns in the calls we escalate — such as the same issues cropping up again and again — we’ll reach out and suggest they add calls for those issues to our scope, so we can also resolve those issues without escalating them.

Despite their satisfaction with our work, they hesitate. Their initial response in some cases is along the lines of “We don’t think we can afford to pay you to handle more calls.” That’s because they may not immediately recognize that paying us more actually costs them less. In fact, the more calls we handle for them, the lower their total cost of doing business. It may sound counterintuitive, but it’s absolutely true.

How It Works

How can this be? It comes down to a calculation we call Netfor’s Total Cost of Ownership (TCO), which reflects our ability to perform the same functions more efficiently, with greater scale, and a higher level of customer satisfaction than the client could in-house.

Clients generally turn to Netfor for one of two reasons. Often, it’s because their specialists, engineers and technical staff are spending an inordinate amount of time taking support calls from users (usually for redundant, low-level issues), interfering with the work they’re supposed to be doing and were likely hired to do. The other reason is that the client’s in-house customer service is performing below the marketplace’s expectations, evidenced by scathing online reviews.

For sake of argument, let’s say the client’s compensation package for those specialists, engineers and technical staff is fairly generous. In fact, their average engineer earns roughly double what Netfor pays our team of service desk agents. So every time they push a call to Netfor’s team, they’re essentially paying half the cost to resolve the customer’s issue than if they allowed their in-house subject matter experts to deal with it.

In fact, they’re actually paying even less than that, because they forget that each time their specialist interrupts work to patiently instruct a caller to repower the device, that specialist’s productivity and value to the company suffers. Additionally, having to deal with support calls can have a negative effect on their morale and job satisfaction.  Freeing those specialists to perform the work for which they were hired frequently has a compound effect on the company, as their strategic and often transformative work benefits the entire company or customer base.

Calculating Total Cost Of Ownership (TCO)

When we compute Netfor’s TCO, we consider what both the client and Netfor pay the people who will handle the calls, and how much time it takes to resolve an average issue. That results in a graph that clearly shows that the larger the percentage of calls the client sends to Netfor, the more money the client saves. The number of calls hasn’t changed, but the cost of handling each decreases significantly.

Total cost of ownership graph
Current TCO 2020

And again, beyond the cost, sending more calls to Netfor reduces the number being handled by specialists and other well-paid staff, so they can focus their time on projects and strategic initiatives, increasing their satisfaction with their jobs.

Finally, another benefit is that calls are being handled by experienced agents who specialize in resolving issues for users at a level they can comprehend and with efficiency that they  have come to expect from an experienced team. As a result, Netfor often turns frustrated or angry callers into someone who ends up with a better impression of both the service and the company that delivers it.

Once clients understand Netfor’s Total Cost of Ownership and recognize the considerable benefits and cost savings resulting from directing our team to handle more of their calls, their hesitation quickly erodes. Plus, beyond the cost savings, they benefit from the high-quality support our team provides, enhancing their image in the marketplace. It’s definitely a win-win situation for everyone.

Learn more about how Netfor is changing the face of Outsourced IT.

Categories: Uncategorized


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