05 Feb Start Building The 2029 Version Of Your IT Service Business Today
Have you ever thought about what your organization would look like in 10 years? Will the same quality people be involved, or will your company rely on artificial intelligence and robots to perform manual tasks? On the payment side, will your clients pay in some form of digital payment?
Those are just a few of the potential changes that business owners may need to address over the next few years, and some of those transformations are already underway. The good news is the future appears quite bright for IT services firms that develop solid business transformation plans and deliver the offerings that meet their clients’ shifting needs.
Investing in future technologies is a great starting point. While most channel professionals still shy away from the riskier “bleeding edge” types of products and services (i.e., AI and blockchain), those adoption cycles shorten more every year.
End-user demand is at least partially responsible for that trend. The younger generations’ comfort level with technology along with the increasingly complex business environment ‒ including the constant upsurge in government regulations and cybersecurity risks ‒ are also fueling the adoption rates.
CompTIA’s recently released 7th Annual State of the Channel report cited emerging technologies as the number one driver of change across the tech ecosystem. Researchers cited future demand for artificial intelligence, virtual reality, blockchain, drones, IoT, and other innovative products and services as significant drivers for IT services businesses over the coming years.
Be the hero of the story
The future is coming whether you’re ready or not, and building a successful strategy for emerging technologies requires a substantial amount of time for preparation and planning. The problem is most IT service professionals have several distractions every day are forced to spend more time working in their businesses than on their businesses; causing future strategies to fall down the list of priorities.
Be assured, those who fail to engage their clients in these emerging technologies discussions put their organizations at risk. IT services companies must work closely with their clients to align their respective business plans if they hope to create a “win-win” situation for everyone.
Knowing exactly what to focus on and what will change is no easy feat, but there are some universal questions MSPs considering future technologies should ask when outlining their 10-year plan.
- What challenges do your customers expect to encounter in that period of time?
- Inquire about potential competition, new compliance requirements, and profitability concerns.
- Would technologies you don’t currently offer solve that clients’ problems or lessen their anxieties?
- Will network, hardware, and security infrastructure improvements be required to support any innovations?
- Investments in the cloud, IoT, business intelligence and mobility solutions may also entail other technological upgrades.
- What role will clients’ employees, contractors, and end users play in the future, especially regarding IT procurement and cybersecurity strategies?
- How much will clients be willing to spend on the latest technologies?
- Survey the decision makers on demand and spending limits.
- Whenever possible, turn those commitments into contracts
Of course, that’s just a partial list. As an IT services business owner, you must thoroughly understand the client demand for emerging technologies ‒ and payment limits ‒ before committing a substantial amount of their time and energy to launch new products and services.
Funding the business of 2029
As with any component of a long-term business plan, a stable cash flow strategy is essential, and failure is always an option. Those thoughts should always be in the back of entrepreneurs’ minds as they build out future portfolio plans and assess the investment requirements for each new technology. It’s fair to say that many IT services companies will fail to make a successful transition over the next few years and fade away ‒ as they have since the advent of the IT Channel.
That’s the rub. How can firms successfully acquire all the skills needed to support emerging technologies and market those new capabilities to existing and prospective clients without going bankrupt? Companies like yours will need a plan and a significant budget to hire professionals with those skills, train current staff, and launch promotional campaigns ‒ at a bare minimum.
Don’t forget the hidden costs such as lost productivity during the ramp-up period and payments for new vendor and industry certifications. Building the business of 2029 could get very costly.
That’s why IT services firms need to pay closer attention and put greater focus on their financial foundations. Why borrow to pay for the expansion? Astute owners focus on continual cash flow improvement and growing wallet-share with existing clients and reinvest a significant portion of their profits back into their companies each year.
If some IT services firms only collected their overdue accounts receivables, they could self-fund the expansion of their emerging technologies portfolio. It’s not uncommon to hear providers discuss carrying clients with $10K to $100K balances for six months or longer.
Whether the system for tracking invoices or the process is inefficient, or no one has time to follow up on overdue accounts, they’re essentially giving away their future. Collecting that money quicker will not only improve their bottom lines but allow them to get a jump start on building IT services provider businesses for 2029 ‒ and beyond.