Research: IT Service Providers misaligned with their customers’ needs
Tue, 05/12/2015 - 14:11
EDINBURGH – 12 May, 2015 – LogicNow, the world’s leading integrated IT Service Management platform provider, has today announced the results of its Global IT Service Providers Harmony Report, an annual healthcheck of the global IT Service Management market. Rather than find Harmony between IT Service Providers and their customers, the ‘compare and contrast’ survey found a concerning level of Discord between what customers need and expect, and what IT Service Providers are delivering.
LogicNow surveyed over 1,300 IT departments and almost 700 IT Service Providers across eight geographies: North America, UK, Germany, Italy, Brazil, Benelux, France and Australia & New Zealand, in order to gain an understanding of market needs across the globe, and if they were being met.
IT Service Providers’ offerings fail to match IT Departments’ priorities: The research showed that IT departments initially reach out to IT Service Providers to help tackle an immediate, business-critical need. But in response, many IT Service Providers immediately try to offer a wider, more consultative service – prioritizing this above addressing the immediate requirement. Considering IT departments rank the provision of CIO consultancy at the very bottom of their priorities, this is an area of huge potential frustration for IT Service Providers’ customers.
A misunderstanding of relationships: The research found a substantial disconnect between IT Service Providers and IT departments in how their relationships should evolve. 64% of IT Service Providers were keen for their customer relationships to move towards greater strategic consultancy – keen to offer wider, more diverse knowledge-based services. But only 13% of IT departments felt the same, with the remainder split evenly between wanting no change at all, and actually wanting more focus on tactical, technical IT support instead.
Future of Managed Security service provision flawed: Asked where managed security offerings should improve, IT departments are most keen to see better email security; better web protection; and better anti-virus. IT Service Providers on the other hand are planning on prioritizing security consultancy and offering more proactive system updates and patching – both indicative of the misalignment in the relationship mentioned above. Indeed, IT departments ranked both of these “improvements” to the Managed Security offering towards the bottom of their priorities.
Unfriendly pricing structures: 76% of IT departments want to pay for managed security services with a single invoice on either a monthly, quarterly or annual basis that encompass all the charges for all their IT security needs – technology licences and associated services combined. Concerningly, 49% of IT Service Providers are invoicing in exactly the wrong way (invoicing for every technology individually, or on an ad hoc basis) – and even worse, 66% are deliberately not planning to change their invoicing processes in the next 12 months.
“At LogicNow, we champion the Managed Service Provider model. IT departments benefit most from proactive support rather than service providers simply reacting when things go wrong. And at the same time, it’s a more profitable business model for service providers,” said Dr Alistair Forbes, General Manager, LogicNow. “However, our Global IT Service Providers Harmony Report clearly shows that IT service providers need to be patient in their pursuit of this model and choose their timing carefully. Pushing strategic consultancy too early in the relationship gives an impression of under-valuing the immediate concern weighing heaviest on the customer’s mind. IT departments engage with service providers because they have a particular problem that needs solving. This must be addressed first to earn the opportunity of a strategic engagement later on.”
“However, despite the apparent discord, there are positives that emerge from the research,” concluded Forbes. “The market opportunity for Managed Services remains buoyant – every researched country showed a strong appetite for outsourcing IT, and that service providers’ have a strong track record of closing managed services deals. The issue is the risk of getting the relationship off on the wrong foot and ultimately the amount of potential profit being left ‘on the table’ by the mismatch between the priorities of service providers and IT departments. Fortunately, this is a problem for which the solution is entirely within the control of the service providers. A closer match between the needs expressed by their clients and the way in which they position their services will lead to stronger and ultimately longer-lasting and more profitable business for them.”
The full 'Global IT Service Providers Harmony Report' is available for download here.
LogicNow was created when GFI Software restructured to support rapid growth across its portfolio. LogicNow, which includes MAXfocus (formerly GFI MAX), IASO cloud back-up and ControlNow (formerly GFI Cloud and Mail Essentials Online), delivers SaaS technologies under a subscription model.
As the world’s most widely-trusted managed service provider & IT support platform, MAXfocus has a decade of technology expertise, the backing of a 10,000-strong community and the industry vision to define and deliver the future of the MSP market. IASO is one of the leading brands in Hybrid Cloud Backup, Disaster Recovery Software and cloud storage for MSPs, large enterprises, telecommunication and hosting providers. ControlNow is an IT management solution for thousands of Corporations and is winning market share from traditional on-premises competitors as companies IT becomes more complex and fragmented and the need for management in the cloud increases.
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