How The Channel Is Battling The Perfect IT Service Storm With On-Demand Labor
This article originally appeared in Telecom Reseller on June 8th, 2015.
Shrinking margins. Rising costs. Intensifying competition. In many ways, the current IT services market resembles a perfect storm. And life for today’s IT and unified communication (UC) service providers has grown incredibly complicated as they try to weather that storm. Their mandate is no easy feat: helping deploy the right IT and cloud solutions for their enterprise customers and keeping them armed with the latest voice and data systems needed for success in a modern world.
IT and UC providers also grapple with tough mandates from their OEM partners. In an effort to closely control the end-user experience, companies such as Cisco, Avaya and HP set rigorous installation requirements and mandate extensive training for their service providers.
The VARs and MSPs I work with shed even further light on the challenges facing today’s IT providers. They talk about pricing pressures and shrinking margins. They talk about not having the right talent in place to grow their business. Suffice it to say, they’ve got a lot on their plate.
So how are they adjusting? What are they doing to address this perfect storm? I posed those very questions to a number of IT and UC providers at a recent conference. Not surprisingly, most of them offered differing responses, although there was one constant theme.
The New Face of IT Services: On-Demand Labor
Every single person I talked to acknowledged the importance of agility and speed in today’s hyper-responsive service world. They all talked about building a field service workforce that could:
- Accelerate response times to meet aggressive SLAs
- Proactively anticipate customers service requests
- Outmaneuver competitors and secure a first-mover advantage
So what’s the key? How do you build a field service organization that is nimble enough to adapt to unpredictable market conditions? The simple answer: by building an on-demand workforce of independent contractors that can be deployed in real-time. In other words, the right person at the right place at the right time.
By now, most IT service providers are utilizing 1099 independent contractors in some form or fashion. But some are taking it a step further. They’re starting to embrace a true on-demand workforce, one that consists of a deep bench of certified contractors — all the way from Cisco Certified Network Engineers (CNEs) to HP break-fix technicians and everything in between.
By curating a bench of contractors well-versed in different OEM technologies, these service providers are able to fill critical skill gaps, expand market coverage and offer more services to their enterprise customers (who are actually looking to consolidate their vendor relationships anyway). Plus, an on-demand workforce of 1099 contractors helps them embrace a variable labor cost model that reduces W-2 workforce expenses and improves financial flexibility.
The premier IT service organizations that we’ve studied are even taking it to another level. They’re making investments in cloud-based Freelance Management Systems (FMS) that help them manage their field service operation — recruiting, dispatching, training and payment — all from a single dashboard. FMS software allows them to tap into a robust marketplace of premier IT contractors so they can efficiently build on-demand talent pools of certified technicians across the country. Top IT service providers are embracing FMS software to transition to an on-demand workforce and manage the complexities associated with non-traditional (i.e. 1099) workflows.
I firmly believe the on-demand workforce model is here to stay, and within a few years it will become the dominant model for IT service providers. No one is quite sure what the unpredictable IT world has in store, but one thing is for sure: the future of IT services will revolve around on-demand labor.
