Written by: Peter Cannone, CEO of OnForceToday, client organizations are demanding that their solutions providers simplify the conversation: They don’t want to make IT decisions; they want to run their businesses. With so many other issues to deal with, most clients are willing to pay for a solutions provider that makes technology simple. Delivering this kind of expert on-site service has always been core to the value proposition and revenue mix of leading VARs. Yet now more than ever, market trends, end user needs, and innovative service delivery models are combining to create opportunities for any solutions provider that seeks to make life easier for its clients.
For most VARs and solutions providers, margins on hardware and software have decreased, whereas the profit potential for services has skyrocketed. A key component of any services offering is being able to deploy on-site expertise when and where it’s needed. Delivering on-site service for rollouts and managed services for POS (point of sale), VoIP (voice over Internet Protocol), wireless, security, and printing is now two to five times more profitable than providing the related hardware. And solutions providers are following the money — right to on-site service.
While on-site service is increasingly viewed as critical to channel success, the means to this end — delivering quality on-site service profitably — has proven challenging. Many solutions providers still rely on staff technicians augmented by freelance technicians on an ad-hoc basis. This staffing model ensures that a company cannot capitalize on spikes in demand, scale up or down quickly, or satisfy customer requirements. It’s a broken model. The good news is that the model is finally changing, and it’s changing rapidly. Demand for on-site services is inherently variable and unpredictable. The supply of on-site expertise must be just as variable and flexible. To thrive in this environment, a company must be able to offer on-site service all the time, anytime, whenever and wherever a client needs it.
What’s the key to an on-demand service model? The same idea that’s been powering every marketplace, from NYSE to eBay, for more than a century — open the marketplace and let buyers and sellers come together to find a common ground. Utilizing this concept, the online marketplaces are changing the way on-site IT services are procured and provided. Portals like OnForce enable VARs and solutions providers to scale their service capabilities instantly, staffing projects on demand. They can use the platform to price projects at market value, and challenge traditional players for new clients and projects in the high-growth areas of rollouts, upgrades, and managed services. And they can do so in any location in the United States.
Using market index information aggregated from national work orders (an example is the OnForce MarketView Web tool), VARs can price, win, and fulfill new projects and gain clients in a cost-effective manner. With Web-based onsite services procurement, users can find complete information on pricing and demand for IT services by category and by state, anywhere in the country.
o Maine, West Virginia, and Vermont are the most expensive states for IT service, whereas California, Ohio, and New Jersey are among the least expensive states per hour.
o Work orders are accepted in as little as 3 minutes in South Carolina, Ohio, and Florida, where technician coverage is dense. But acceptance time is longer in states with fewer providers such as Wyoming, Alaska, and Delaware.
o VoIP and consumer electronics are among the priciest categories, nearly double the average rate of the POS and Printer categories.
Companies including Irvine, CA-based GA Services have found they can leverage online procurement to simultaneously roll out projects for their clients in hundreds of locations across the country. Southfield, MI’s TechTeam uses Web site services to improve basic maintenance scheduling for clients, reducing costs and improving the VARs’ profits.
Using a service procurement portal allows businesses to take risks and try new areas of service that they may otherwise be hesitant to try. The growing service needs for VoIP and consumer electronics technologies (e.g. home networking) present opportunities for VARs willing to grow into new areas.
In the channel’s future, on-site service will drive revenue growth. Marketplaces such as OnForce offer a new path to profitability in which a deep on-staff bench is no longer required to win and fulfill large, complex IT projects. Driving profitable revenue growth is about optimizing staff utilization rates, increasing the quality of on-site service, and being able to scale quickly on demand — all without carrying the staff and overhead costs of the traditional service models.
To download the complete Whitepaper “8 Ways to Drive On-Site Service Revenue NOW!” go to www.onforce.com or call 1.800-599-9312.
Peter Cannone was named CEO of OnForce in 2007. He is responsible for product development, operations, sales and marketing. Cannone was previously senior VP of sales operations with PC Connection and was responsible for the company’s IT solutions provider base, including SMB, higher education, government, and Fortune 1000 segments. With extensive executive experience at PC Connection, Merisel, MicroWarehouse and Xerox, Cannone has a broad perspective on overarching trends in the service sector and a deep understanding of technology services.