Technological expertise does not assure an IT services business’ success. Nor do the tools and people they hire. In fact, scores of highly competent tech professionals have experienced business failure despite having the solutions their clients want and people with the right skills to deliver them.
What many of those entrepreneurs lacked was solid business acumen. Not an MBA in management or accounting — though a growing number of tech entrepreneurs do — but the ability to make sound financial decisions and continually strengthen their operational processes. Those aptitudes are essential to building a healthy cash flow and effective business plans, and developing contingencies for when the inevitable things that can go wrong actually do.
One of the most important aspects of business acumen for today’s IT services businesses is operational efficiency. With so many processes, policies and people in play at virtually every moment of the day, the management team must continually focus on reducing the time and costs associated with service delivery. Their revenue and customer retention goals depend on it.
Innovation is also a driving force in operational efficiency. IT businesses have evolved significantly over the past 10 years with the advent of managed and cloud services, and the model may shift even more substantially in the next decade.
Cutting-edge processes and technologies age quickly today and need upgrading or replacement more rapidly than in the past. And the cycle of change, particularly in the IT services space, continues to speed up with each passing year.
Complacency in business processes can be just as detrimental to MSPs, VARs and cloud providers as technological obsolescence. Continual improvement in both areas is not an option today — it is mission critical.
Those enhancements should include everything from the sales, marketing and billing and collections processes to the customer-oriented service delivery side of the business. No part of the business should be ignored.
That requires a frequent if not continuous top-to-bottom review of every process and each tool that IT services providers use to run their business operations. Everything should be fair game. From the portfolio to the structure of the business, inefficiencies and weaknesses that could impede progress must be identified and addressed.
Process improvement is simply the best way to ensure IT firms are well positioned to hit their revenue and profit growth projections, and to remain relevant to their current and prospective customers. Even when unknown factors or unexpected issues come into play, businesses with solid operational efficiency plans will be well prepared to respond and succeed.
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