CSG Systems Inc.
2525 117th Avenue
Omaha, NE 68138
402 431 7000



Date: Mon, 15 Apr 2002 11:38:18 -0500


Mr. Rod Welch
rowelch@attglobal.net
The Welch Company
440 Davis Court #1602
San Francisco, CA 94111 2496
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Subject:   SDS Pilot Test at CSG

My followup:

The calculation for cost of not having a working knowledge-base type system at CSG.
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Situation:

Bundle release of CSG flagship product. 5 errors discovered that were the result of information not being documented and available for retrieval. Involved 3 additional meetings (1 hour average) of 8 to 10 employees/managers to resolve. Took these additional meeting since no one was able to recall previous converstions/meetings to a level of agreement. The lack of resolution resulted in additional call center work (installation related effort was doubled [from ticket tracking reports] for 3 additional work days. Development effort to resolve these issues approximately 135 hours. Repush software to client was required to alleviate the problem (1 day).
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The calculation:

Resolution meeting cost: 

    8 employees * 3 meetings (1 hr/meeting)    =  24 hrs


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     24 hrs * $65 /hr loaded employee cost(LEC)           =  $1,560.00

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Additional call center work 


    22 employees * 24 hours (3 days * 8 hours) = 528 hrs

    528 hrs * 55/hr LEC                                  = $29,040.00

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Development rework: 


    85 hours development time * $65/hr LEC               =  $5,525.00

    42 hours testing * $60/hr LEC                        =  $2,520.00

    10 stage and delivery * $65/hr LEC                   =    $650.00

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Staff/Management Communications meetings: 


    18 employees * 3 per day * 3 days * 1 hr   = 162 hrs

    162 hrs * $65/hr LEC                                 = $10,530.00

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Repush of Software: 


    25 employees * 6 hours                     = 150 hrs

    150 hrs * $65/hr LEC                                  = $9,750.00

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Total effort of 3 business days expended. $59,575.00 / 3 days = $19,858.00 for staff requirements.
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This can be doubled when the cost to our client base (over 1,000 desktops impacted) and executive management involvement is factored in: = $39,716 per day.
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Would an SDS program have eliminated the above 5 mentioned errors: In my professional opinion a resounding yes, since these 5 failures could all be attributed to loss of communication, not lack of it.
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Next Steps:
  1. CSG (at least my immediated director) has shown little interest in this type of improvement. Why? The major reason is lack of incentive; My director, "those numbers are interesting but I can't imagine something changing our culture and way we do business!" In other words, "I'm not spending 15-40k [per month], to try and fix something [to save $40K per day x 20 days = $800K per month] I don't think can be fixed" [losing $800K per month through failed communication]...
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    So what can be done?
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  2. Take SDS/POIMS to the next level. Quick Story: Good friend of mine, has developed a "widget" and got it patented. He thought he could do everything, manufacture, market, package, etc. on a shoe-string budget and let it gradually build into the business that would make him wealthy and put his "invention" in every meeting room around the world. Things didn't work out as he planned, a lengthy hospital stay, complications, and other problems has resulted in him sitting on this truly wonderful device... so, why not move this to the mainstream?
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    • Write the "book". You seem to have enough information to put this together and I'm sure the public would buy it.
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    • Start the company that needs to build the computer system. Maybe the model is Grady Booch's Rational Corporation.
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    • Act now before this truly paradigm shifting technology is lost.
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Will right more tomorrow...

Sincerely,

CSG Systems Inc.



JerryN

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Jerry Nord
Jerry_Nord@csgsystems.com