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Activity Number:
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406
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Type:
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Contributed
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Date/Time:
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Thursday, August 12, 2004 : 8:30 AM to 10:20 AM
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Sponsor:
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Business and Economics Statistics Section
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| Abstract - #300597 |
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Title:
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Measuring the Preventive Value of Remote Maintenance
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Author(s):
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Ping Zhang*+ and James M. Landwehr and Mihaela Serban
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Companies:
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Avaya Labs Research and Avaya Labs Research and Carnegie Mellon University
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Address:
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233 Mt. Airy Rd., Rm. 2D-14, Basking Ridge, NJ, 07920,
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Keywords:
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Simpson's Paradox ; case control study ; network monitoring ; return on investment ; generalized linear models ; cost-benefit analysis
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Abstract:
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Modern businesses depend critically on the availability of communications networks. The maintenance and management of these networks is a valuable service often provided by service providers or equipment manufacturers. How do we measure the business value of a service agreement? The standard industry practice is to measure service quality through various service level agreements (SLA). We propose an alternative approach based on statistical comparison of customers with or without a service agreement. We analyze a set of real data with 450,000 trouble tickets from 68,000 products over a five-month period. Here service agreement includes remote monitoring. Our main result shows that, among customers that experienced major problems, having a service agreement reduces the chance of a network outage by 65%. In other words, remote monitoring has preventive value that is significant and quantifiable. We conclude by presenting a simple cost-benefit analysis showing that outage rate reduction can be translated to customer benefit in monetary terms.
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