What financial impact can untracked issues have on your business?

Jan 5, 2017 3:28:59 AM / by Sarah Spangler

Any argument for implementing a company-wide software solution has to start with the costs involved - more specifically, whether or not the new platform will justify the implementation expense. But when it comes to issue tracking, it's less about demonstrating a software return on investment through new revenue and more about illustrating cost avoidance. That can make it seem harder to justify the initial investment, but in reality, those are just two paths to the same result: a better bottom line.

For platforms like issue tracking, the whole point is to prevent problems like customer complaints or IT tickets from lingering unchecked and causing inefficiencies, redundancy and customer dissatisfaction. Those end results are the items that cost companies money - and those are also the types of concerns the best issue tracking software platforms will address.

Financial impact on businessWhen customers complain, how well do you respond?

Untracked issues can become more costly over time

It's hard to quantify exactly what an unchecked issue will mean for your business in monetary terms. That's because a complaint, a technical support need or an incomplete workflow item are not costs in and of themselves. However, while their initial presence could seem harmless, their ongoing existence can generate unwanted expenses and speaks to a larger concern at hand.

"One dissatisfied customer may tell 20 people about a bad experience."

For example, when a customer logs a complaint, that act does not yield a cost in one direction or another, generally speaking. At most, there may a shipping cost to waive or a product replacement to arrange. But if that customer doesn't receive the immediate attention he seeks, that single complaint can damage your company's reputation. One dissatisfied customer will tell as many as 20 people about a bad experience, according to the White House Office of Consumer Affairs. Meanwhile, authors Emmet and Mark Murphy wrote in their book "Leading on the Edge of Chaos" that increasing customer retention by 2 percent is equivalent to lowering costs by 10 percent.

The same concept holds true for internal issues, as well. One tech ticket shouldn't hold things up too much at first, but as it lingers it can prevent employees from working effectively and have a detrimental effect on productivity. Here, again, the item itself is not a cost, but as it sits idly, it begins to have negative financial impact.

Another way you might estimate how harmful unchecked issues can be to your bottom line is to analyze lost productivity. Maybe an employee sells $1,000 worth of product per day. If that individual spends half the day trying to track down an internal problem, that's $500 in revenue the company doesn't generate. Similarly, in a manufacturing setting, internal issues can lower productivity overall. If a plant typically produces $120,000 worth of goods in 1,500 hours, it has a labor productivity of $80 per hour of work, according to an equation from the Bureau of Labor Statistics. If a workflow inefficiency increases that time to 1,550 hours, that's the same as foregoing $400 worth of productivity.

Why a software platform is the answer

The best issue tracking software platform performs tasks automatically that might otherwise require a dedicated team to handle manually. That's because a software solution takes into account everything from the process of logging a complaint to tracking how long an item remains in the system without being addressed to developing reports after an issue is resolved. Along the way, the right platform will provide transparency and action points for those involved.

Those features are too advanced to effectively reproduce in a basic spreadsheet, but they are also necessary parts of a successful issue-tracking protocol. Without a holistic approach, things get lost in the shuffle and begin to transform from simple, painless fixes to costly, complex problems.

Ultimately, the math on issue-tracking cost avoidance is simple: Either risk letting complaints and issues remain in your system for weeks and incur unnecessary costs, or employ a platform that will streamline the process and prevent expenses from building.

Topics: Issue Tracking, Software Solutions

Sarah Spangler

Written by Sarah Spangler