Recently talking to a friend who is working on a business case for setting up an IT Infrastructure services practice, fact that scale matters a lot come up strongly across various scenarios we discussed. Since several delivery models require 24x7 operations, across various technology (or sub-technology flavors), often times the staffing done is to meet these requirements of having a resource available at all times but the resource may not be fully utilized. However as the scale of operations increase, the per equipment FTE number decreases dramatically and the cost per ticket (as one metric) reduces substantially.
And since this is a services business ( read people's business), a larger scale of operations helps in better employee retention with the employer being able to provide better prospects for job rotation, career progression and varies exposure as the scale of operations increases.
This is one reason which keeps a high entry barrier for this business. While there are several players in the market, many are waiting in the wings to reach that critical threshold which would help them be more competitive and offer a compelling cost case to their prospects.
And since this is a services business ( read people's business), a larger scale of operations helps in better employee retention with the employer being able to provide better prospects for job rotation, career progression and varies exposure as the scale of operations increases.
This is one reason which keeps a high entry barrier for this business. While there are several players in the market, many are waiting in the wings to reach that critical threshold which would help them be more competitive and offer a compelling cost case to their prospects.
