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Why should a tech provider care about operational efficiency?

Because, as your business shifts from just selling hardware to also providing IT services, your business — and that of your customers — is getting more complex.

And if a new report from tech association CompTIA is right, you’re probably finding this complexity something of a struggle.

To obtain its data, CompTIA recently surveyed 400 U.S. IT-channel firms. Just one in five (20%) of the surveyed companies said their current operations are very efficient.

Over a third (39%) described their operations as only mostly efficient. And a final third (36%) described their operations as so-so, with some operations efficient, others not.

That’s not to say channel companies don’t care; they do. Six in 10 (60%) of the surveyed channel companies said their approach to operational efficiency is proactive and structured. But a third (36%) said their approach is merely ad hoc or reactive. As CompTIA says, the former group is preventing fires, while the latter is trying to put them out.

Getting complicated

If the tech-provider business feels more complicated to you, you’re not alone. In the CompTIA survey, nearly half (49%) the respondents said their business has become more complex to run now than it was just 2 years ago.

The leading cause of that new complexity, the survey respondents said, is the need to manage and analyze new streams of data. This factor was cited by over half (53%) the survey takers.

Other top causes of additional complexity, the survey finds, include expansion into new business line, emerging technologies, and challenging customer engagements.

New tech, new skills

The cloud, no surprise, is another big issue for tech providers. In its survey, CompTIA asked IT channel companies why they’ve changed their business model. Over half (53%) the respondents — the largest group — cited the cloud.

Other emerging technologies — including AI, blockchain and virtual reality — are driving business-model change among IT channel companies, too. This factor was cited by nearly half (49%) of the respondents.

New skills will be required for these new technologies, CompTIA says. These new skills can be added by hiring new workers, training current staff, using contractors and freelancers, subcontracting to services providers, or some combination of all of the above.

Get efficient now

Put it all together, the tech association says, and the need has never been greater for channel companies to operate efficiently.

In fact, CompTIA’s director of industry analysis, Carolyn April, warns that channel companies with what she calls “loose operations” could be leaving big money on the table.

“If you’re captaining a leaky ship,” April says, “it may be the difference between a 10% margin and a 25% margins for the year.”

So now you know why you should care about operational efficiency. And why you need it now. 

 

Blog Category: 
Advanced Technologies