Solving a Problem from Industry: IT Services - Part 2
Previous Note:
Here are a few different angles to analyze the IT Services industry to find gaps:
One good way to dig out gaps for the above is to follow the product life chain. Study the product journey from first deployment, initial customization to ongoing maintenance mode. And understand perspectives from the three connected parties within this chain:
The IT Services industry is boring. Boring is repeatable, stable and in this case, humongous.
Each of the above areas is a significant opportunity to create an enterprise company. Happy digging and building!
Related Notes:
Here are a few different angles to analyze the IT Services industry to find gaps:
- Repetitive Manual Work: A large chunk of work is in this category. Most large IT Services providers organize their company structure by service lines. QA, Maintenance, and Support teams are the usual suspects. Most of this work gets done offsite or offshore.
- Enterprise Integrations: Application count in a typical enterprise IT application landscape is high. Critical applications. Applications that run the usual tasks. Redundant applications. Custom applications. Tremendous opportunity in creating integrations. Pick one large application and study all external interfaces.
- Platform Migrations: New high-growth enterprise providers win sales by convincing customers to migrate. But their professional services have a limitation. They understand their own product inside-out. But they lack understanding of all the legacy products already in deployment. IT Service providers make a killing here by doing these migrations. To create a startup enabling migrations, focus on reducing three key parameters. Cost, disruption and time.
- Compliance Testing: Compliance adherence is costly and it never ends. Add to this the permutations and combinations that vary by industry, size, and region. Stable revenue stream opportunity.
- Reusable Components: It is not possible to replace all custom software development. Even in my life as a solo investor, off-the-shelf products don't always meet my needs. So I end up building simple product variants by customizing existing software. Now imagine this at an enterprise scale. But avoid the temptation to boil the ocean. Understand the most common custom software pieces that clients ask for. Within these, look for repeat components. Dashboards are a super common example. Mobile adaptations are another. This rides the consumerization of the enterprise trend. Reusable components can combine to become a library. And sold as an industry-specific or application-specific toolkit.
- Application Rationalization: Large IT Services providers aim to take over the entire IT. What is the main driver? Maintaining legacy applications and their interfaces with other applications. It is not possible for most enterprises to hire talent for all applications. And even if they did, the utilization percentage will be sub-optimal. IT Services providers can spread the same resource across many engagements. The availability of better applications over legacy deployments doesn't always convince the clients. Cost is a major issue. We have smart financial engineering for most products and services in our daily lives. But the world of enterprise technology lags behind.
One good way to dig out gaps for the above is to follow the product life chain. Study the product journey from first deployment, initial customization to ongoing maintenance mode. And understand perspectives from the three connected parties within this chain:
- Enterprise Vendor,
- Client of IT Services Provider, and
- IT Service Provider.
The IT Services industry is boring. Boring is repeatable, stable and in this case, humongous.
Each of the above areas is a significant opportunity to create an enterprise company. Happy digging and building!
Related Notes:
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