Cost per Incident

“how do you determine cost per incident?”

Cost per incident is a variation of cost per call or cost per contact, all of which are excellent ways to understand the impact of incidents, calls, or contacts on the business.

The calculation is fairly straightforward. Cost per incident is the total cost of operating your support organization divided by the total number of incidents for a given period (typically a month).

Cost per incident = total costs/total incidents

To accurately calculate cost per incident you must:

• Log all incidents. You may also find it beneficial to distinguish between incidents (unplanned events) and service requests (planned events). Such a distinction will enable you to more accurately reflect business impact
• Identify stakeholders. Determine all of the support people involved in the incident management process (e.g., service desk and level two/three technical and application management teams). 
• Identify associated costs. Create a list of every cost associated with your stakeholders including salaries, benefits, facilities, and equipment. Many of these costs will be included in your annual budget or can be obtained from financial management.

As illustrated in the ROI calculator, tremendous cost savings can be realized by reducing the number of incidents. This can be accomplished by using trend and root cause analysis techniques via the problem management process, as well as through integration with processes such as change management, service asset and configuration management, and release and deployment management.

Savings can also be realized by reducing the number of incidents escalated from the service desk to other lines of support, or by increasing the number of incidents handled via self-help services such as a web-based knowledge management system. Some organizations report on cost per incident per channel (e.g., per call, e-mail, chat, walkup) to better understand these savings.