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Computer Services - Are They a Commodity?

Posted by Sean Kline

I meet with presidents, CEOs and owners of small businesses every week to discuss what computer services they are using (whether internal or external), what it costs them and the results they are seeing.

computer services

The starting point of many of these folks, I believe, is that computer services are pretty much all the same and that they are getting good enough results the way they are doing things.  The first premise is simply incorrect.  The second may be true, but the logic around determining that is generally not sound.

So, why or why not are computer services all the same?  I would estimate that 90% or more of IT services providers in this market segment are reactive.  Generally, there is a model in which the provider allocates some hours of time for maintenance, it provides remote monitoring, remote backup or other like tasks and picks up the phone when there is a problem.  So, I would agree that these services are a commodity.  The same is true, by the way, when there is an internal person (typically one who has another set of responsibilities) supplemented by an external firm.

What kind of results may we expect with such a process?  This is a key question to ask and answer honestly.  A far smaller percentage of IT managed services firms take a different approach and are able to impact business results rather than only provide commodity services (these, by the way, are necessary, but insufficient).  Here are some questions you can ask of your own process:

  • What services are actually included?  Be specific in terms of deliverables and outcomes
  • How much do these services cost?  Again, think all-in (hardware, software, contracts, extra billables)
  • What other costs do you incur? (productivity, risk, lack of functionality, etc.)

This is a longer conversation which is not amenable to a blog post, but the fundamental reason why computer services are not all the same is that they are composed of a number of discrete processes.  It is digging down to this level of detail to see what results one may achieve that distinguishes one service from the other.  Processes are only one part of it - there are other elements that separate those who are punching a clock on those who become an integral part of the business.

Key Takeaways:
  • Being open minded about the complexity and difference of computer services will allow you to make better decisions
  • Computer services are not all the same because of the underlying processes and other factors
  • Introspection on your current support model, including what it is, what it costs and what other costs there are on the business is eye opening
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Topics: IT Managed Services