As a former player in the IT services industry, I fully understand the challenges and opportunities arising in the fast-changing world of IT services.
A recent ING report indicates that consolidation in the Dutch IT services sector will slow down but continue. From 2017 to 2022, the number of mergers and acquisitions in the IT services sector increased from 290 to 620 transactions. That is an annual growth rate of over 16%, over 4% more than the number of acquisitions in the Dutch economy.
The report highlights some key factors driving this trend, including changing customer demand, labour shortages, and pressure on margins due to the standardisation of IT services.
Changing customer demand
Customer demand is changing rapidly. Customers now demand a wider range of services from their IT provider. Providing and managing digital workstations is no longer enough. Customers also demand data security, cyber security and the provision and management of IT infrastructure. As an IT service provider, customers come to you with all their questions. It seems like you have to become a one-stop shop for your customers. Should be able to help them with anything IT-related.
But how do you know what that customer demand is? How can you adapt your portfolio to meet this changing demand?
While offering a wide range of services is essential, it is equally important to understand your client’s specific needs. It would be best if you focused on identifying and understanding the unique needs of your customers. Based on those needs and your standard services, develop customised solutions that add value to their business.
I recommend you focus on differentiation. Respond to specific customer requests. And then look for similar customer requests in the market. That way, you address a specific group and can add unique value. For example, you could specialise in providing advanced cybersecurity services for companies in the financial sector or designing IT solutions for healthcare companies.
By differentiating yourself, you make yourself more attractive to your target customers and differentiate yourself from your competitors. This allows you to build more profound and valuable relationships with your customers, leading to higher customer loyalty and more business growth.
Labour shortages and mergers
Staff shortages in the IT sector are a significant barrier to growth. Over 42% of entrepreneurs say that not finding the right employees is the biggest reason for not being able to grow further. The need to recruit skilled staff has initiated an upward trend in mergers and acquisitions, as this strategy allows companies to amass talented employees.
How to deal with this complex situation? How can you ensure that your organisation remains attractive to current and future employees and potential acquisition partners?
Again, differentiation and unique value propositions help. By standing out in the market and creating a unique culture attractive to employees, you can make your company more appealing. This can be done by investing in employee training and development, offering flexible working opportunities or promoting an innovative and inclusive corporate culture.
In addition, offering unique services or products, or targeting specific niches in the market, can make your business attractive to potential acquirers. These strategies can help address current staff shortages and remain attractive in an increasingly consolidated market.
At Force21, we understand the challenges you face as an IT service provider. Our team consists of experienced marketers, innovative product developers and successful Commercial Managers with a wealth of experience in Cloud, Hosting, Service Providing and SaaS. We are not just a service provider but a strategictively promotes your success in your unique market partner that ac.
We help you by developing customised business solutions that seamlessly match the constantly changing demands of the IT sector and your customers’ needs. More importantly, we use our extensive market knowledge to support you in making informed decisions, maximising your competitive advantage.
With Force21 by your side, you will not only be prepared for the future of IT services but also become a driving force in shaping it.