UK IT providers predict strong growth, but remain concerned about low billable hours

RICHMOND, ENGLAND: IT providers in the UK are noticing a serious discrepancy between optimal billable time and reality.

In a new Autotask survey, just over 46 percent of UK IT companies said the optimal target for billable time is 70 percent to 90 percent, and another 16.5 percent said it should be 90 percent or greater. But when asked how much of technicians' time is currently billable, 27 percent of respondents put that number at 50 percent or less. An additional 20 percent said between 60 percent and 70 percent of their technicians' time is billable.

According to respondents, 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 to optimally schedule technicians to balance their time.

The Autotask 2014 IT Service Provider Benchmarking Survey was conducted by the research firm Decision Tree Labs and included responses from 1,300 IT service providers globally, 10 percent of which are in the UK.

IT companies in the UK predict that managed services will remain their largest growth area this year. Managed services ranks as the top business model, and providers believe client renewal rates will improve as a result of increased managed service contracts. From that growth will come new hiring-45 percent of 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.

Those new hires may help companies focus on service levels, an area of concern for UK providers. The survey found that only 41.7 percent of companies achieve top service level agreement (SLA) response time compliance (91 percent to 100 percent), leaving more than half at less-than-optimal levels.

The survey also found that the expansion of cloud services is the biggest factor driving demand for IT services, surpassing the headline-grabbing but less critical areas of 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 percent of total IT services spend.