Cost Management Via Problem Prioritisation

(circa 1997)

Christopher Rath

Acknowledgements: Christopher Rath is not the primary author of the background materials consolidated in this discussion paper: the data and methodology captured herein were culled from Problem Management Process documentation written by individuals in Bell-Northern Research Division 4 in the early 1990s. That said, the application of these ideas to construct a flat service delivery model is mine.

The purpose of this discussion paper is to present an approach to problem and incident prioritisation that allows the construction of a flat service model which stratifies service by problem, in real time, instead of pre-stratifying service based upon expected needs prior to problem occurrence. For example, rather than assigning service priority to servers (say, Enterprise and Workgroup) when they are installed, each problem with a server is prioritised in real time when the incident takes place. The ideas in this paper can be used to construct such a flat service model.

Using the ideas in this paper, a flat service model would be executed by only performing the amount of service in response to each incident or problem that is warranted by the cost to the business of the outage caused by the problem or incident.

Problem Costs — In Wasted Time

Using the definitions for task importance and impact (see below), an estimate can be calculated for the amount of time per person being wasted because of the problem or incident. If a person’s primary job function is in a critical state, 100% of their time is being wasted. A minor, non-essential task can still be seen as time wasted, since some amount of time will be spent learning about the problem and discussing it with support personnel and co-workers.

The following table shows the wasted time for each person affected by an issue.

Time wasted per person due to problem

Impact of Issue

Critical

Significant

Minor

Task Importance

Primary

100%

25%

5%

Secondary

25%

5%

1%

Nonessential

5%

1%

0.2%

Definitions:

Impact: what is the impact of the problem on the item?

Critical—the item is completely unusable; no workaround exists.

Significant—the item is only partially usable or fails occasionally; no workaround exists.

Minor—the item is currently usable; a workaround exists.

Function: what is the function of the item affected by the problem?

Primary—the item is the user’s main job.  Work stops until the problem is resolved in some way.

Secondary—the item is an important part of the user’s job, but is not completely preventing work from being done.

Non-essential—the item is not important to the user’s work, but may still be a useful item.  Work will continue almost unaffected.

Problem Costs — In Dollars

The wasted time estimates presented above can be applied along with 3 questions in order to estimate both the approximate cost per hour to the Corporation of that issue (assuming a loaded labour rate of $51/hour) and the point at which that issue has cost the Corporation $1,000.

The following tables show the cost per hour and the point at which problem cost reaches $1,000.

Many People Affected
(10 or more)

Impact of Issue

Critical

Significant

Minor

Task Importance

Primary

>$500
(2 hours)

$250
(4 hours)

$50
(2 days)

Secondary

$250
(4 hours)

$50
(2 days)

$12.50
(8 days)

Nonessential

$50
(2 days)

$12.50
(8 days)

$2.50
(2 months)

 

A Few People Affected
(2–9)

Impact of Issue

Critical

Significant

Minor

Task Importance

Primary

$250
(4 hours)

$50
(2 days)

$12.50
(8 days)

Secondary

$50
(2 days)

$12.50
(8 days)

$2.50
(2 months)

Nonessential

$12.50
(8 days)

$2.50
(2 months)

$.50
(1 year)

 

One Person Affected
(1)

Impact of Issue

Critical

Significant

Minor

Task Importance

Primary

$50
(2 days)

$12.50
(8 days)

$2.50
(2 months)

Secondary

$12.50
(8 days)

$2.50
(2 months)

$.50
(1 year)

Nonessential

$2.50
(2 months)

$.50
(1 year)

$.10
(~3 years)

Problem Classification — Severity Levels

The problem cost tables displayed in the previous section can be used to construct problem severity tables which correspond directly to a problem’s ongoing cost.  These detailed severity assignments allow support personnel to properly prioritise their work and may be used by the larger, global organisation to focus the “problem solvers”: that is, to get the right number of people focused on the right problems (and ongoing reassessment of a problem’s current state empowers management and staff to move key resources off contained issues and onto more pressing work, with a goal of maximising resource usage and minimising cost).

See the next section for the definitions of the 3 questions.

Many People Affected
(10 or more)

Impact of Issue

Critical

Significant

Minor

Task Importance

Primary

1

2

3

Secondary

2

3

4

Nonessential

3

4

5

 

A Few People Affected
(2–9)

Impact of Issue

Critical

Significant

Minor

Task Importance

Primary

2

3

4

Secondary

3

4

5

Nonessential

4

5

6

 

One Person Affected
(1)

Impact of Issue

Critical

Significant

Minor

Task Importance

Primary

3

4

5

Secondary

4

5

6

Nonessential

5

6

7

Background — Three Question Details

The three questions referred to by the cost tables, above, are asked when the problem is first examined and then re-asked whenever new information comes to light or a partial solution is implemented.

Question 1: What is the function of the item affected by the problem?

How important is the affected item to the individuals involved?

Primary—The item is closely connected to the individuals’ primary job. All work stops until the problem is resolved in some way.

Secondary—The item is a major part of the individuals’ work. Work can continue, but the individuals will be inconvenienced.

Non-essential—The item is not important to the individuals’ work, but may still be a useful item. Work will continue almost unaffected.

Question 2: What is the impact of the problem on the item?

What state is the item in? How usable is it?

Critical—The item is completely unusable.

Significant—The item is usable, but with major problems. The item may completely fail occasionally.

Minor—The item is usable. A workaround exists.

Question 3: How many people are affected by this problem?

This refers to the probable number of people actually affected rather than the reported or potential number. For example, an error in a man page potentially affects every system with that man page installed on it. However, the man page may be for an obscure C function that might only be looked at by a very small number of people.

Many—Ten or more people affected

A Few—Two to nine people affected (about the size of a single department)

One—Only one person affected


©Copyright 2007, Christopher & Jean Rath
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Last updated: 2007/05/28 @ 21:25:26 ( )