that matter · 2017. 3. 16. · itsps are also reaching new revenue heights, with more companies...
TRANSCRIPT
METRICS THAT MATTER
THAT MATTERANNUAL ITSP BENCHMARKING STUDY
®
METRICS THAT MATTER
About the Survey
Executive Summary: Setting Sights on Growth
Workforce Expansion in the Works
No End to Endpoint Increases
Shifting Priorities, New Opportunities
Automation: The Key to Smart Growth
Manual Tasks Are Costly
Recurring Revenue Is Essential
Success Metrics Are Shifting
Outreach Improves Customer Satisfaction
Conclusion
TABLE OF CONTENTS
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METRICS THAT MATTER
Decision Tree Labs conducted the Metrics That Matter survey in July 2017 on behalf of
Autotask Corporation. More than 1,030 ITSPs from around the world responded.
ABOUT THE SURVEY: A NEW ERA OF ITSP
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Executive Management
Sales & Marketing
Service/ Help Desk
Project Management
Operations
Other
Professional Services
42%
7% 6% 9%
17% 12% 7%
LOCATION RESPONDENTS BY ROLE
North AmericaEurope, the Middle East and AfricaAsia-Pacific Region
61% 29%
10%
METRICS THAT MATTER
In a world where cloud platforms and
applications, mobile devices and big
data are commonplace, and businesses
are increasingly integrating advanced
technology, such as wearable devices,
artificial intelligence and machine
learning, the information technology
service providers (ITSPs) who keep those
systems running are more important
than ever.
As the ITSP market has matured, this
year’s numbers indicate that established
firms are winning more business, with
both project and ticket volume increases
scaling positively according to ITSP size.
Those logging more than 26 projects or
between 10,000 and 100,000 tickets per
year saw the greatest volume increases
in those respective categories.
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PROJECT VOLUME
TICKET VOLUME
EXECUTIVE SUMMARY: SETTING SIGHTS ON GROWTH
Less than 5,000 tickets each year dropped by nearly 13%
5,000 to 10,000 tickets increased by 5%
10,000 to 100,000 increased by nearly 8%
26 to 50 projects a year increased by 7%
26+ projects a year increased by 10%
1 to 25 projects a year decreased by 9%
METRICS THAT MATTER
ITSPs are also reaching new revenue
heights, with more companies jumping
over the $2 million annual revenue mark.
This year, the more money you grossed,
the faster you were likely to grow.
As they grow, so does the need for better
people, processes and technologies
to maximize and manage that growth.
ITSPs are using more remote monitoring
and management (RMM) systems
to help them identify issues with
clients’ networks and platforms, and
address or escalate them immediately.
Such automated monitoring and
deployment is good for both the ITSP
and their clients, because it streamlines
processes, and improves efficiency
and effectiveness.
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<$2 MILLION ANNUAL REVENUE
$2 TO $5 MILLION ANNUAL REVENUE
$5 MILLION+ ANNUAL REVENUE
Reduced by 8% since 2016
Grown 3% since 2016
Grown 2% since 2016
Reduced by 27% since 2013
Grown 2% since 2013
Grown 5% since 2013
REVENUE GROWTH CONTINUES FOR ITSPs
METRICS THAT MATTER
With continued expansion expected as dependency on technology continues to grow,
ITSPs must invest in onboarding and training the best employees possible to compete and
gain market share in an increasingly demanding sector.
Three-quarters of respondents said they’re adding up to 10 people over the next year to
accommodate growing ticket and project volumes. While service desk staff dominate
when it comes to headcount increases, other functions are also seeing their share
of expansion.
WORKFORCE EXPANSION IN THE WORKS
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Growth Point: Many respondents are also hiring engineers and development personnel, pointing to the need for successful ITSPs to develop talent and create a deep bench of skillsets and expertise.
Service Desk Staff
Salespeople OperationsProject Staff Marketing
64% 40% 35%36% 20%
WHERE ITSPs ARE STAFFING UP IN 2017-2018
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METRICS THAT MATTER
“It’s not enough to have a great product or solve a particularly complicated business challenge, clients want to know that investing their money is going to deliver a strong return, and that the company they choose to partner with is going to help them maximize their investment. This starts right at the initial point of sale and means the employees that represent your brand need to be highly qualified to ensure your clients’ success.”
Mark Banfield Senior Vice President & General Manager International at Autotask
7METRICS THAT MATTER
METRICS THAT MATTER
With laptops, tablets and smartphones integrated into most workplaces, ITSPs are
managing more endpoints—and their focus on expanding service teams reflects that
need. While the percentage of ITSPs managing more than 1,000 endpoints stayed flat year-
over-year (39%), it is still up nearly 5% from 2015, the first year the question was included
in the survey.
But that doesn’t mean respondents aren’t seeing growth in this area. Half saw a steady
increase in the number of client endpoints year-over-year—and that momentum is
continuing. In fact, 63% of this year’s survey respondents said the total number of
endpoints they’re managing increased by up to 50%.
NO END TO ENDPOINT INCREASES
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Key Insight: As the Internet of Things (IoT) brings more connected devices into the workplace, the number of endpoints will continue to grow. The 2016 State of the Endpoint report by the Ponemon Institute found that 60% of respondents had greater difficulty in managing endpoint risk in the 24 months preceding the survey.1
Between 76% and 100%
More than 100%
Lost endpoints
Between 51% and 75%
Between 26% and 50%
Between 16% and 25%
Between 5% and 15%
Flat, or less than 5% 14%
35%
20%
8%
2%
2%
3%
1%
ENDPOINT INCREASES YEAR-OVER-YEAR (2016 TO 2017)
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METRICS THAT MATTER 9
Since the first Metrics That Matter survey was released in 2013, client priorities and critical
investments have matured and evolved. One area that clearly illustrates these changes is
data security, which has grown from a top revenue driver for a small minority of ITSPs to a
major business driver for ITSPs.
SHIFTING PRIORITIES, NEW OPPORTUNITIES
6%
2013 2015 2017
63% 44%
HOW SECURITY SERVICE REVENUE HAS GROWN
“IT strategy, process operations or security
consulting” is a top revenue driver
Security accounts for 30% or less of revenue
Data security is the #1 priority for clients and new business driver
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METRICS THAT MATTER
The survey also revealed shifting priorities among ITSP clients, which dictates how the
ITSPs themselves expand their services. In just the past two years, ITSPs have seen
changes in their clients’ most pressing concerns.
Even as priorities shift, key revenue drivers have remained consistent over
the past two years.
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Key Insight: Even as areas such as endpoint management and business continuity remain a key priority for many businesses, clearly, they are making investments in various areas of security, which are critical to mitigate risk and keep their businesses operating.
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Disaster recovery and business
continuity
Data security
Endpoint security
Information security
Backup and restore
Internet security
Always-on environments
Business continuity
Mobile connectivity
Endpoint management
Email security
51%
44%
70% vs. 71% 57% vs. 52% 29% vs. 26%
51%
36%
32%
30%
36%
31%
2016 PRIORITIES
2017 PRIORITIES
TOP SECURITY-RELATED SERVICES DRIVING REVENUE – 2016 VS. 2017
METRICS THAT MATTER
Growing business volume, revenue and headcount is good news for ITSPs and bodes
well for the industry overall. To maintain that growth and continue to scale effectively,
ITSPs need to find new ways to automate and streamline processes. Here, respondents
give themselves high marks in service and support, but need to improve in selling
and invoicing.
AUTOMATION: THE KEY TO SMART GROWTH
How would you rank your organization’s automated
delivery processes in the following areas?
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Key Insight: Nearly two-thirds of small to midsize businesses (SMBs) get paid late, and invoicing delays add to the time it takes to get their money,2 according to a 2016 survey by Fundbox. Such lag times have a significant impact on how your company can invest in new hires, marketing—and even payroll.
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AUTOMATION OF KEY PROCESSES
60%
40%
20%
0%Selling Service Invoicing Support
Good Need to ImproveExcellent
METRICS THAT MATTER
The survey also revealed that many ITSPs are wasting up to 10 billable hours each week
on manual processes that can be easily automated, such as entering data into multiple
systems, scheduling and dispatching technicians, and capturing billable time. Such
activities eat into profitability through lost revenue, delays and increased potential
for errors.
While hiring more people can help organizations keep pace with increasing demand to an
extent, automating service delivery and business management lets ITSP leaders focus
on areas that will help them grow and become more profitable instead of getting bogged
down in rote, day-to-day tasks.
MANUAL TASKS ARE COSTLYKey Insight: The demands of meeting client needs and managing a growing business make it difficult to prioritize automation internally. This is where vendors can be invaluable partners, integrating and streamlining communication between cloud-based apps, and making it simple to integrate disparate tools and automate processes to help the ITSP grow and scale service delivery.
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Data entry into multiple systems
Maintenance of on-premises software
Inability to optimally schedule and dispatch technicians
Inability to accurately capture billable time
Maintenance of on-premises hardware
Maintenance of disparate operational systems
69% vs. 73%
67% vs. 68%
68% vs. 70%
66% vs. 67%
67% vs. 68%
64% vs. 65%
WHERE ITSPs LOST UP TO 10 BILLABLE HOURS PER WEEK – 2016 VS. 2017
METRICS THAT MATTER
Demand for managed services and cloud-based
services
Improved service desk processes,
performance and automation
efficiency
Improved service technician
performance
48% 41% 37%
TOP CAUSES OF RISING RENEWAL RATES
Sustainable growth requires both acquiring new clients and retaining current ones.
Most respondents have high renewal rates. When asked to attribute the reason for
their rising renewal rates, this year’s respondents pointed to improvements in service
desk processes, performance and automation efficiency, as well as improved service
technician performance.
61% of respondents reported annual renewal rates of 90% or more.
RECURRING REVENUE IS ESSENTIAL
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METRICS THAT MATTER
ITSPs use a few key metrics to gauge success. A year-over-year comparison of those
metrics points to a growing focus on customer satisfaction—it has become so important
it now tops the list of metrics that matter.
SUCCESS METRICS ARE SHIFTINGKey Insight: As your own organization grows, it’s a good idea to track customer demands and the shifting metrics by which you measure success. Doing so will help you adapt your service offerings and increase customer satisfaction.
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Customer satisfaction rating
Response time
Billable resource utilization
Gross profits
45% vs. 52%
51% vs. 52%
55% vs. 51% 53% vs. 47%
METRICS THAT MATTER – 2016 VS. 2017
Profitability by customer
48% vs. 44%
METRICS THAT MATTER
“ITSPs are uniquely positioned to help drive innovation and growth. When they have a 360-degree view of all the technologies implemented across the organization, they gain insight into the results being delivered and can clearly see the impact of those results on their operations.
That insight can greatly impact major business decisions.
Ultimately, ITSPs that use a professional services automation solution can provide access to the core metrics and trends associated with the technologies that SMBs deploy.”
Mark Cattini President and CEO at Autotask
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METRICS THAT MATTER
ITSPs are expanding the breadth of channels they use to reach and engage with clients to
improve satisfaction. In last year’s survey, customer surveys, Knowledgebase and
self-help portals topped the list of channels. This year, there has been a significant shift
in how ITSPs engage with clients.
Although having an assortment of client service channels, including webinars and events,
is important, automation is essential in the customer satisfaction realm, too. Finding
ways to automate and streamline customer service response and modes of collecting
feedback helps ensure consistency and will also help improve internal efficiencies.
OUTREACH IMPROVES CUSTOMER SATISFACTION
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Key Insight: Even growth-minded ITSPs are under-investing in automated service channels, such as live chat (22% vs.15% in 2016) and self-help portals (29% vs. 32% in 2016), that could deliver critical competitive advantages.
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Social media Customer surveys
Knowledgebase
Knowledgebase
Customer surveys
Outbound communication
52% 49%
34%
Outbound communication
Social media
26%
41%
46%
49%
TOP CHANNELS USED TO IMPROVE CUSTOMER SATISFACTION (2017)
TOP CHANNELS USED TO IMPROVE CUSTOMER SATISFACTION (2016)
Self-help portals
32%34%
METRICS THAT MATTER
The 2017 Metrics that Matter survey clearly shows that ITSPs are in growth mode. But with
growth comes growing pains. Shifting customer demands, recruiting and training new
employees, proliferation of endpoint concerns and outdated manual processes are key
challenges that ITSP leaders must face.
As the sector and the businesses in it mature, forward-thinking ITSP leaders must
embrace the tools that will help them scale their operations. Automation will be a key
competitive advantage for many. Those who employ tools such as RMM will eliminate
inefficiency that hurts profitability, while optimizing technician time and capturing billable
hours. Increasing automation in areas like selling, customer service and invoicing, where
ITSPs give themselves low marks in adoption of automated processes, can further
improve new business development, customer retention and cash flow.
Business technology continues to evolve. IoT promises to be a game-changer in terms
of connected devices in the workplace, making ITSPs even more in demand. Prepare to
make the most of these opportunities by investing in the talent and systems you need to
meet increased demand and scale your business.
For more information on how client needs are changing and how ITSPs can respond, visit
the Autotask resource center at www.autotask.com/resources.
CONCLUSION
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METRICS THAT MATTER
SOURCES1 Ponemon Institute, 2016 State of the Endpoint Report, April 2016.
2 Fundbox, “Fundbox Study Reveals Crippling Effects of Late or Unpaid Invoices,” March 16, 2017.