Greg owned a IT Services Provider in Virginia. He’d founded the company out of college with one client and steadily grown his business to employ a staff of nine. One thing Greg liked to do at the end of each year was sit down with his technical director and sales manager to review the previous year’s work. They looked at revenues and margins. They examined customer satisfaction data. They discussed new employees and old. As the review took place, a picture of where the business had been and where it was headed would start to emerge, and the trio would set goals for the upcoming year.
However, last year’s review wasn’t turning out the way Greg had hoped.
Less than 10% of the company’s revenue came from Active Directory consulting. Less than 10% came from cloud integration services. Less than 10% came from hardware sales as part of the solutions they provided customers. Less than 10% came from virtual server deployments. Another 5% came from remote desktop subscriptions. Less than half came from monthly recurring contracts via managed services…the very thing that was supposed to be their central business offering.
“Fellas,” Greg sighed, “I’m all for a diverse set of offerings, but in looking at what we did last year…I’m having a little trouble figuring out exactly what business we are in. I knew I had been feeling pulled in a dozen different directions. We can’t possibly be great at all of these things…”
Greg’s company faced a problem that plagues many small businesses. The need for revenue simply to stay in business leads to a mentality that any sale is a good sale, even if it doesn’t fit with the company’s core mission. Even when a company grows in a way that results in substantial revenue, it can be hard to learn how to say “no” to opportunities that don’t fit the company mission. Twenty hours of project work at $160 an hour? “YES.” Management of a colocation NAS system? “SURE, WHY NOT!” Installing security cameras at six different retail locations around the city? “OK, WE DO THAT TOO!” Reconfiguring wireless access points for city utility? “YOU BET, WE’D BE GLAD TO HELP!”
Yes, you have to generate revenue to stay in business. But bidding on and competing for every opportunity placed in front of you will result in a company that is spread too thin and never develops expertise in a specific niche or service. True, your customers may not care so long as you can fix their IT issues. But as a business owner or CIO, you should know that IT services specialization can deliver a more consistent (and superior) customer experience and a more consistent and profitable bottom line compared to jumping from one disparate opportunity to the next. Some banks are great with commercial real estate loans, while others excel at financing small businesses. Some restaurants serve Italian food, while some serve hamburgers and french fries. Having the tools and capability to do a little bit of everything doesn’t mean it’s necessarily a good idea. It is near impossible to have the resources in house to do a great job on every technology related opportunity that comes your way.
Having a limited number of offerings can provide substantial short and long term benefits to your organization. For example…
1. Specializing will allow you to better allocate resources. No more sending a Windows technician to try and work his way through an Office 365 migration in a Mac environment. Saying, “I’m sorry, we only perform migrations on Windows machines” may mean turning down business. But it will also allow you to deliver an excellent customer experience with the least amount of headache for your team.
2. Specializing will allow you to hire specific skill-sets and expertise instead of hiring technicians that are merely average working on a wide range of technologies. No more asking which technician is familiar with Exchange or which technician has experience with Red Hat. Your technicians will now be experts on the services you offer, capable of doing an excellent job for your clients.
3. Specializing makes growth and profitability much easier. Your planning is more accurate if you are performing the same kind of work regularly. As with any activity, repetition creates efficiencies. By specializing, your technicians will become more efficient in their work over time. Increased efficiency means saved time and reduced expense. That means more money in your pocket.
4. Specializing makes marketing and lead generation much easier. There are literally dozens (if not hundreds) of IT organizations in every market in this country. Searching the internet for “IT support in (city)” is likely to bring up pages and pages of results for prospective clients. But specializing means you can stand out in the crowd. “IT Support for Quickbooks“…”Sharepoint training”…”Windows server maintenance.” There are so many IT service providers that profess to do everything well that standing out in the crowd can be a challenge. By keying in on specific services, you can differentiate your company from everyone else.
There are many more advantages to finding a speciality or two and focusing on it. Most importantly, finding a specialty can prevent you having to chase the next dollar coming through the door. When you review your business like Greg did, you should aspire to have a core set of offerings upon which to reply for the health of your business. Specializing will open doors you have not previously imagined and lead to improved customer experiences and enhanced job satisfaction among your own team. If your specialization means you need to look for partners to help assist on complex solutions, contact Mosaic NetworX!