Information Technology Services Meaning, Nature, Strategies

Table of Contents:-

  • Information Technology Services
  • Nature of Information Technology Services
  • Service Marketing Strategies of Information Technology Services
  • Market Segmentation of Information Technology Services

Information Technology Services

The growth in the Information Technology (IT) industry is perhaps the fastest of all within a decade or so it has become a multi-billion dollar industry. There are small and big players in this industry, each one is trying to establish a unique position for themselves. This unit is closely intertwined with the aforementioned concept, as it aims to explore how marketing can be beneficial to such organizations.

Recently there has been an increase in the use, demand and implementation of Information Technology (IT) globally and in India. The emerging technology has found applications in various sectors including industry, offices, and homes, and is seen to be a multi-billion dollar industry in the upcoming years. What had started in the 1970s as an effectively hardware or computer-oriented industry has now become a multi-dimensional force with an increasing influence on the quality of life.

Information Technique Services or Information Technology Enabled Services are defined as “outsourcing of processes that can be enabled with information technology and covers diverse areas like finance, HR administration, health care, tele-communication, manufacturing etc”.

Equipped with state-of-the-art technology and a skilled workforce, these services are efficiently delivered from digitally enabled locations. The revolutionary approach not only reduces costs but also improves service standards. In short, this Internet service provider aims to provide B2B e-commerce solutions.

Nature of Information Technology Services

1) Knowledge-Based

Unlike other common industries, the IT services are knowledge-based.

2) Helps in Growth

The IT industry helps many other sectors in the economy’s growth process, including the services and manufacturing sectors.

3) High Economies of Scale

Economies of scale for information technology services are high. The marginal cost of each unit of additional software or hardware is negligible when compared to the value addition that results from it.

4) Eliminate Human Labour

IT-enabled services eliminate human labour from the direct co-creation of value. This has a two-faceted effect. On one hand, customers receive reliable, predictable, and consistent outcomes from the service. On the other hand, the supplier organisation has no direct, active way to co-create value with the customer.

5) Inherently Ubiquitous

Moreover, most information technology services are inherently ubiquitous. The use of service is not bound by limitations of time and space. Thus, the production and consumption of service can be described as spatiotemporally separated, especially in terms of human labour involved.

6) Coping with Unexpected Inputs

Whereas humans can flexibly cope with unexpected inputs from the customer and still co-create value, IT services are inherently limited to dealing within the range of inputs and requests for which they were specifically designed. The design of an IT-enabled service is, therefore, essential.

7) Acts as the Business Processes

Depending on the context, Information Technology (IT) services can also serve as the backbone for various business operations and services, which may originate from a location separate from their users or beneficiaries and are subsequently delivered through information technology via telecom networks.

8) Skilled Labour Forces

IT services have skilled labour. Efficient utilisation of skilled labour forces in the IT sector can help an economy achieve a rapid pace of economic growth.

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Service Marketing Strategies of Information Technology Services

A unique feature of IT is that it is both a product and a service and therefore, the marketing principles and practices do not conform to the conventional methods adopted for marketing other products or services.

While planning the marketing strategy of IT services, the strengths and weaknesses of the player and the opportunities and threats to the industry are to be kept in mind. For example, the well-qualified, English-speaking youth is considered the greatest strength of the Indian IT industry. This opens the gateways to marketing our IT services to different countries in the world.

There is a large business opportunity in English-speaking countries across the world. The Indian IT industry also has many opportunities available for growth, in the form of skilled human resources, government support and low costs of operations, which can be availed of to create new markets and expand the business. The strategy to expand the market for IT services may involve providing a wider range of services to existing customers by entering a hitherto unexploited market or by creating a new demand that did not exist earlier. The key to success depends on how effectively these strategies are implemented.

Market Segmentation of Information Technology Services

The market segmentation of the IT industry can be done based on geographic locations, turnover of the customer companies, requirements of the specific groups of customers, categorisation of industrial and non-industrial users, etc. As a major portion of the IT solutions are targeted at the corporate sector, segmentation is generally corporate-centric. However, given the rapid pace of growth of the industry and the extensive use of IT in almost all walks of life, it is difficult to categorise the market into isolated and watertight segments.

The turnover of customer companies and the magnitude of their business is one of the popular bases of segmentation. Based on turnover, companies are divided into small, medium and large. Some services are developed exclusively for the use of large companies and some for small ones. For example, SAP AG, an ERP solution provider, targets companies that are on the list of Fortune 500 companies, whereas Evoluous, another ERP solution provider, concentrates on medium and small companies. Turnover is taken as the basis because the requirements of the company depend on the size of the company.

Segmentation could also be based on areas of operation, which includes domestic and export markets. That is, it is determined whether the services are targeted at the local market or are earmarked for export to foreign customers. For example, during 2002-03, the earning capacity of the Indian software and services market was estimated to be around US$ 12 billion comprising exports of US$ 9.5 billion and domestic revenues (excluding IT training) of US$ 2.5 billion.

Sometimes segmentation is also industry-based because each industry has special requirements. Solutions are developed to cater to such special needs. For example, Oracle Corporation developed solutions to meet the exclusive needs of the financial services industry. These specific IT services can be marketed by concentrating on the relevant segment.

Information Technology Services​
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