Will your IT service delivery model be relevant in 2025?

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A question to leaders of IT Service Providers (ITSPs) and IT Managed Service Providers (MSPs) … How prepared are you to leverage the next generation of technologies to deliver to your customers’ SLAa?

At the time of writing this blog, I routinely take part in thirteen strategy meetings per week. These meetings are with the owners, business leadership, mid-level management, sales and marketing functional leaders, and technical execs of ITSP/MSP firms. I also enjoy being on cold calls and in sales discovery/exploration sessions with new prospects. I typically speak with about twenty business execs weekly on my cold calling efforts and enjoy about three to five discovery/exploration sessions weekly. It would be fair to say that the population sample underpinning what I speculate is robust.

I have noticed for a considerable time that when people bring up service delivery, be it with our existing clients or new prospects, the modus operandi is ‘business as usual.’ ITSPs secure turnkey projects and deliver to the scope a fixed deliverable for a fixed amount. This could be modernising an organisation’s workplace, upgrading their network to SD-WAN, conducting a cybersecurity threat analysis, implementing Microsoft Teams Phone, etc. MSPs strive to win recurring revenue contracts whereby they are effectively the IT department of their customers. I believe very firmly in outsourcing IT, be it for single projects that IT professional service organisations deliver or for end-to-end IT support such as the ones MSPs offer.

When it comes to service delivery, though, I see that ITSPs and MSPs tend to leverage the ‘human’ factor of delivery by default. After all, they are in the people business, and people typically solve problems in the IT industry. They calculate costs based on hours invested in a project. MSP service fees often consider the hours required to service the SLA effectively and efficiently. This is where I propose a change. We as a collective are not embracing forward-facing technologies as much as we should. Leaders of ITSP/MSP firms must adopt and embrace the next generation of technologies as part of their service delivery equation.

A plethora of technology-driven innovation and disruption is already here. But are we embracing it to completion? For instance, Automation and AI. And when I refer to Automation or AI, I mean Automation (X) and AI (X). As in various use cases and implementations of Automation and AI. For instance, in use cases such as:

  • Automating tasks and operations
  • Saving time and costs 
  • Optimising processes
  • Boosting productivity
  • Improving CX 
  • Maintaining assets
  • Managing incidents
  • etc.

The macro and micro economic conditions are uncertain in 2022. I doubt 2023 will be much better. Inflation is placing increasing pressure on organisational budgets. ITSPs and MSPs are finding it more difficult to resource effectively due to a lack of talent available in the market. The great resignation/reshuffle is also making the talent game further convoluted. In Australia, the gap between the market demand for IT talent and what the education supply chain is serving up is large.  

ITSPs and MSPs must deliver to customers SLAs with less staff. The solution is not merely throwing people at it. There is not enough talent available in the market and not enough coming through the education supply chain. The solution is also not in delivering services how we have for years (even decades). Legacy technologies and approaches require people to deliver the outcomes. The solution lies in embracing the next generation of technologies.

How well prepared is your ITSP/MSP organisation to embrace the next-gen of technologies? How will you deliver to customer SLA requirements with fewer people at your disposal? The next generation of IT involves tech trends such as composable applications, distributed enterprises, AI, ML, hyper-automation, etc. Will these trends drive you into irrelevance, or will you embrace these to create the next generation of your function or business?

At Resonate, we work very closely with the ownership, leaders and managers of ITSP and MSP firms on all things strategy, marketing and sales. Please reach out to me (rk@resonate.com.au or 0412 517 237) if you would see the benefit in leveraging our subject matter expertise of helping ITSPs and MSPs increase their profitability, grow market share, scale, and head towards the desired exit.

RK is the CEO & Co-Founder of Resonate.

RK is Resonate’s chief strategist, thought leader, and IT industry veteran. Our clients depend on RK to advise on their business strategy, channel strategy, and sales strategy. 

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