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View Deepali  Rai 's Profile
Information technology and services and margins in the market
How could an IT services firm improve its operating margins?
T services firms (think IBM, Infosys et al) seem to have plateaued as far as the operating margins are concerned. Infosys has ~30% operating margins, while others such as IBM typically hover around 25% or so.
Asked by Deepali Rai | Jan 15 2017 | Report this Report abuse
Replies (2)
View Devesh  Goyal 's Profile
ts Mainly depends on your firm and what it offers,
cutting overheads is the main one i can think of
i.e. if most of your work force is on the road then you dont need desks in a office for them but do have a few spare desks just in case,
check what you paying for is good deals i.e. broadband,paper,printer ink,etc
poeple dont always check this stuff but the firm i working for just cut supplies bill by 10%(£2,500 per month)
Jan 17 2017 | Report this Report abuse
View Deepti  Talwar 's Profile
One approach that some of these firms are already taking, is to harvest "assets" out of their services engagements. The idea is to capture and reuse the work done for a specific customer, with other customers in similar situations / domains. The assets could be software, design documentation, scripting, processes / workflows, etc.

Another approach is to bring in expertise from other parts of the company, at higher rates. For example, IBM has this programme where experts from IBM Research spend time on customer projects, billable at much higher rates than the usual. Naturally the customer expectation is that these researchers are adding significant value in problem solving, optimization, etc.
Jan 16 2017 | Report this Report abuse