Service provider growth offset by low billable hours

UK IT service providers are missing out on the amount of time they can bill clients, according to a survey by Autotask

UK IT service providers are missing out on the amount of time they can bill clients, according to a survey by Autotask.

According to the report just over 46% of service providers said their optimal billing time is between 70 and 90% of time spent on tasks.

When queried on how much of their technician’s time is billable 27% of respondents said it was 50% or less.  A further 20% said between 60 and 70% of technician’s time is billable.

Apparently between one and 20 hours of lost time each month stems from staff conducting manual tasks across multiple systems, an issue that also complicates tracking and reporting.

More than half of respondents said they lose one to 20 hours per month due to an inability to accurately capture billable time or because technicians are unable to balance their time.

The survey findings are revealing within the context of anticipated growth in managed services with many service providers predicting that this area will remain the largest growth area this year.

Despite the fact that many companies are falling short when it comes to billable hours many believe client renewal rates will improve as a result of increased managed service contracts.

As a result 45% of survey respondents plan to hire additional workers this year. The improved economy, new client requests, the need for new skills and geographic expansion are also driving new hires.

The report, Autotask 2014 IT Service Provider Benchmarking Survey, also found that the expansion of cloud services is the biggest factor driving demand for IT services beyond mobile connectivity and ‘always-on’ environments.

Forrester forecasts that spending on cloud software, platform and infrastructure services will grow from $28 billion today to $258 billion in 2020, reaching 45% of total IT services spend. These predictions are set out in a recent report; Transform Infrastructure and Operations for The Future Technology Management Cycle.

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