IT services firm achieves non-linear growth through automation

Scandinavian IT services firm Cygate has expanded its business without adding human resources by using automation software from IPSoft

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Scandinavian IT services firm Cygate has expanded its business without needing to recruit more staff by using automation software from IPSoft.

In 2010, the company, which serves more than 1,000 customers including some of the biggest corporates in the Nordic region, was experiencing 20% growth in sales. This meant the company needed to add resources or risk service levels deteriorating. But just adding manpower would have reduced its margins.

This is a common problem among IT services firms that traditionally grow in a linear way – typically, they win more business, then add more staff to support it. But service providers are now trying to reach the holy grail of non-linear growth. This means adding business without needing to add to the workforce to support it, reducing the proportional increase in the cost of providing an additional service.

At the same time, increased use of cloud-based IT is forcing IT services firms to add more higher-level support services. Mats Mägiste, CTO at Cygate, said: “We were concerned about how to continue to prosper as a system integrator in the future with everything being put in the cloud. The software suppliers are moving up the business model, so we need to focus our services at a higher level.”

After identifying automation as a strategy to address this, Cygate began working with IT automation software supplier IPSoft. The deal has helped Cygate to automate many processes for customers that traditionally would have had to be escalated by employees. IPSoft’s IPcenter software was integrated with the IT infrastructure Cygate uses to support its customers.

Mägiste said many of the IT transactions between Cygate, its customers and their IT were time-consuming and repetitive, and automation was identified as a way to make savings without reducing service levels.

He said IT support processes, such as those triggered by users forgetting their passwords or network router problems being detected, could largely be automated before a human gets involved.

The savings are clear, he said, but surprising improvements to service quality can also be made. “If an engineer repairs a system, when they are finished, the engineer does not normally ask if the customer is happy – they just move on to their next job. Automation has enabled us to change this by building a user questionnaire into the process when a case is closed.”

Since Cygate deployed IPcenter, its sales have increased by 56% and its pre-tax profit has grown by 118%. The technology has also enabled engineers to move to higher-level services, which add more value.

All of Cygate’s biggest customers integrated onto the IPSoft platform via the service provider.

Research from Quocirca last year found that IT staff spend 30% of their time carrying out basic tasks and are frustrated with the lack of time left to focus on transformational work.

Also, the average IT worker is using only half of the skills they possess because of time spent on straightforward tasks, the research found.

Intellect has been raising awareness of the benefits automation software can bring to UK businesses. It said automation software is underused in the UK, which is currently in its early adopter phase.

Mobile operator O2 deployed software from Blue Prism in 2012 to automate business processes, which will save millions of pounds in back-office operations and cut its reliance on offshore recruitment to cope with spikes in workload.

Other IT services firms using IPSoft technology in their service delivery include Accenture and Infosys. Businesses can work directly with IPSoft or receive services via an IT services supplier.

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