A Thought on IT Services and Commoditization
Have IT services become commoditized because of the standardization of hardware?
Put another way, in our effort to have IT products and parts become more modular and intercompatible, have we created a situation where virtually anyone can provide the services necessary to diagnose and fix IT problems?
Answer: NO. (If you said yes, you're wrong).
Calling IT services "commoditized" misses the point. There are so many services that comprise the implementation of IT services, that IT services can never, in any sense of the word, be called commoditized.
Among other things, IT services includes sales staff, tech support, benchmarking, and reverse logistics. Let's talk about each one....
Your company's sales staff is its selling force—it is the air that your company needs to inhale in order to exist. That function can NEVER be called a "commodity". Good customer service is rare, and until it becomes commonplace, it can't be a commodity. 'nuff said.
Regarding tech support: if you think that tech support is a commodity, then you must also believe that all service centers are exactly the same, all warranty services are handled identically, and all repairs of technology are equally reliable. And if you think all of that is true, then you're a fool. (Sorry, but sometimes the truth hurts).
Tech support varies dramatically from company to company. Even the replacement of a simple capacitor, hard drive, or motherboard can be handled with varying degrees of timing, efficiency, and competency. As long as there is a human component to tech support, it won't—indeed, it CAN'T—be a commodity.
And on a related side note: too often, tech staff are treated interchangeably with sales staff. If your company is using the two interchangeably or, worse, relying on tech support to sell products or services, you need to revise your business model—FAST. Remember, with precious few exceptions, your tech staff can no more sell products or services than your sales staff can fix things.
Benchmarking—if you're not doing it, then your boat is headed straight for the iceberg. How can you determine the level of your services if you have nothing to benchmark them against? ANSWER: You can't. Retain a good benchmarking service, such as Service 800, and make sure your services are the best they can be. Once you start benchmarking things, you'll quickly see that IT services are FAR from being commoditized.
Reverse Logistics—this is the process of getting a defective part or product back to the manufacturer or repair depot for diagnosis and/or repair. Think this is a commodity? Just try to bring a product back to the vendor who sold it to you and see what happens. See how long it takes just to get the product to the repair depot. See how much it costs. Then let me know if you think that such services are all the same. Check out my friends at Flextronics RTS to see how things SHOULD be done. No doubt you'll want to bring these guys into your company's IT support solution....
Commoditization in the IT Service industry? Nope. The two have nothing to do with each other.
Posted by Bradley Gross at 5/20/2009 4:50 PM 
Categories: IT Services
Tags: commodity technology law IT Services technology legal
Categories: IT Services
Tags: commodity technology law IT Services technology legal
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