What keeps IT services leaders up at night?

See what operational challenges IT Services face in 2024

2024: A year of nonstop uncertainty

For IT Services firms, technology is both the backbone and the battleground, meaning these firms are feeling the pressure more than most. The rapid pace of change, fueled by the rise of AI and shifting work practices, has created a perfect storm of challenges. Unlike other sectors, where innovation can be gradual, IT services are on the front lines—forced to adapt, optimize, and evolve at breakneck speed. And, as if that weren’t enough, the economic outlook remains a foggy horizon, with 33% of IT services firms citing uncertainty as a major challenge.

As the demands increase and the margins tighten, the stakes have never been higher. This section explores the toughest hurdles IT services businesses face today and the strategies they’re deploying to survive and thrive in this relentless landscape.

Forecasting the future: A shot in the dark

With 34% of IT services organizations struggling to price and forecast client work effectively, clarity is hard to come by.

The difficulty of predicting client needs and market trends is leaving many firms in the dark, making it harder to plan ahead and allocate resources efficiently.

While the forecasts remain uncertain, many firms are introducing new products and services to diversify their offerings, and to make them more competitive across the market. The trend is toward boutique strategy/consulting.

Optimization is survival

Ensuring staff workloads are optimized is a key concern for 33% of IT services firms.

In a year where efficiency can make or break a business, businesses are focusing inward—streamlining processes and squeezing out every possible drop of productivity.

Building work culture in a hybrid world

Adapting to changing working practices is a top external challenge for 33% of firms.

As hybrid and remote work become the norm, building a cohesive work culture is more crucial—and more challenging—than ever. The talent is there, but so are the complexities.

AI: The game-changer with growing pains

With 34% of firms leveraging AI for client work, the technology is reshaping the landscape, but it’s also requiring businesses to rethink everything.

From retraining staff to realigning strategies, the monolithic rise of AI is both an opportunity and a challenge, demanding swift adaptation.

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Profitability under pressure: Measuring what matters

32% of firms struggle with measuring profitability and time spent on client work.

In a volatile market, precise profitability measurement is crucial. Firms are leveraging analytics and time-tracking tools to ensure every client engagement contributes to the bottom line.

The relentless pace of change

Rapid changes in the industry require constant reskilling and adaptation. It’s no wonder that 30% of our respondents said managing tools and technology is a significant challenge for their business.

As the rules shift beneath their feet, firms must continuously upskill their workforce and tech stack to stay relevant. This isn’t just an evolution—it’s a revolution.

Tip: Consolidating your tech stack to a single platform like Teamwork.com makes onboarding easier than ever. Rather than investing time and money in arduous training in lots of new tools, Teamwork.com makes it easier than ever to onboard both team members and clients. Plus, Teamwork.com has an an easy-to-use user experience and training plan - so they'll actually enjoy using it!

Tech stack overload: Simplify or sink

36% of Value Added Resellers have consolidated their tech stacks this year.

A bloated tech stack can bog down operations and increase costs. To stay agile, more firms are consolidating and simplifying their tools, cutting through the noise to improve efficiency.

Tip: 60% of companies have wasted $30k or more on sales tools that don’t get used. To streamline processes and optimize resource allocation, many firms turn to integrated solutions like Teamwork.com to save time and money.

Client expectations: The unseen challenge

With 36% of firms grappling with increasing client demands, the pressure to deliver has never been greater.

Balancing rising client expectations with internal efficiency is a tightrope walk. Firms must constantly adapt to keep clients happy without compromising their own operations.

Strategic pivots: What are IT services firms doing to help themselves?

Across industries, leaders are making significant changes to address these challenges. Here’s what they’re doing to keep up: