Certainly 2021 was another tumultuous year with the continuation of the global pandemic, political upheavals, and global economic forces which have all heightened concerns about how the IT world will look in the next few years. Here we take a look at some of these trends from the vantage point of a leading Third Party Maintenance (TPM) as they have affected us, our partners and end users.

1.     Right to Repair (R2R) Gaining Steam– We’ve talked extensively about this movement which has largely arisen from the consumer industries. Most major manufacturers have tried to restrict end users and TPMs from doing repairs on their cell phones, tablets, autos, tractors, laptops, etc.

However, legislative initiatives are starting to bubble up globally and specifically in the U.S.  An article from U. S. PIRG sums it up well:

“The COVID-19 pandemic has helped increase urgency for Right to Repair efforts. Lack of access to local repair options has proved to be a major hurdle for hospitals trying to save lives, as well as people attempting to work or learn remotely while offices and schools have been closed. Meanwhile, lawmakers also are focusing on farm equipment issues because industry groups had promised to resolve farmers’ problems by 2021 and have failed to do so.

When the manufacturer or their “authorized” service providers are the only options to repair items, it raises costs for consumers and makes the whole system fragile. When the coronavirus pandemic shut down big box stores, people didn’t have options to fix their devices, and their frustration helped to fuel the energy behind our efforts this year. This issue isn’t going away until lawmakers deliver for consumers.”

The consumer and legislative momentum is welcome news to TPMs and our partners as we’ve been working within these constraints for decades. We’re seeing opportunities to save even more money and deliver effective maintenance timelier because of the R2R movement.

 

2.     Global Chip Shortages Surprised Many and Still Not Rectified– We all started becoming aware of the chip shortage during 2020 and many believed it would start to work itself out by 2021. However, the magnitude of the shortages and many other contributing factors shows that we are far from out of the woods. An article from Tech Republic quotes a Gartner Analyst:

“I’ve heard several different takes on when the chip shortage will end. The latest date I’ve heard was mid-2023, but Gartner VP for semiconductors and electronics, Gaurav Gupta, said that some sectors will see a return to normal by mid-2022. Gupta couches that prediction carefully, though, saying that mid-2022 is when we may see a balancing out of supply and demand but it won’t be a total return to normal.”

 

3.     Broader Supply Chain Issues Affect All Aspects of Operations– By now we all know how the supply chain has completely deteriorated in many parts of the global economy. Adding to chip shortages, our clients are faced with being unable to obtain other IT parts or new infrastructure. Their core businesses have been impacted in some situations.

Interestingly, even major OEMs like Cisco have been affected by supply chain issues. These effects reverberate through the IT world. Here’s a take from some industry analysts in a recent article from CRN:

“But right now, supply-chain issues are creating multiple problems for the company. For one thing, Cisco can’t get enough semiconductors, power supplies, and other key components to fulfill its needs. Manufacturing capacity is also an issue for Cisco, which doesn’t do any in-house manufacturing.

Cisco is providing financial support to contract manufacturing partners to expand capacity, and it’s adding more suppliers to address a severe shortage of finished goods, but the larger problem remains. “

Responding to the supply chain necessitates evaluating your sources of supply and determining if alternative suppliers or third parties can be a solution. With respect to IT infrastructure specifically, we can help you plug into our worldwide ecosystem of spare parts and valued partners who are doing their best to remain able to meet your needs.

As some IT assets near the end of potential useful lives, there may be opportunities to perform preventive maintenance and evaluate available software to extend the operating lives, thus keeping networks fully functional.

4.     Customer Engagement Changed– With lockdowns, travel restrictions and a climate of fear, the ability to call on clients and customers in person has been dramatically reduced.

Comments from a recent Best of Breed CRN Conference are instructive:

“The landscape of how to manage customer engagement has changed dramatically in large part because of the impact from the COVID-19 coronavirus pandemic and other factors, but solution providers can find new ways to prosper in what has become known as the “new normal.”

That’s the word from Jade Surrette, chief marketing officer for The Channel Company, …it is true that the whole IT landscape has changed dramatically.

“And it’s changed in so many different ways for technology organizations big and small,” Surrette said. “And we’ve learned a lot. We’ve learned that we had to be very nimble with how we react, flexible, understanding, things of that nature. And really, when it comes to engaging customers, we’ve had to change how we approach them in a far more digital way than we have ever had to before”

While in person sales calls and events have picked up, the way we do business has permanently changed. The key elements of sales such as defining the need, understanding the customer’s goals and being proactive with solutions have not changed. But there is more emphasis on texting, web marketing, Zoom type calls etc. Everyone has been forced to learn new techniques and up their sales strategies to continue to win business.

In such an environment, there can be wonderful opportunities for those who adjust to the new approaches quicker and maintain good customer engagement even in tough times.

5.     Inflation Has Roared Back and Puts Even More Pressure on IT Executives- The cost of doing business, labor shortages, supply/demand issues, massive government spending, etc. has caused inflation in all sectors unlike anything we’ve seen for decades. Obviously, this affects every aspect of running the IT Department with pressure on labor costs, increased equipment capital costs and more expensive software licenses. The challenge is to just keep everything running effectively while maintaining some level of reasonable cost.

While TPM companies have always offered the opportunity to save mightily on long term maintenance and extending assets lives, we believe there is need for even more partnership because of inflationary trends. Considering the Hybrid Option and planning with IT executives from pre-purchase to the most effective long term maintenance planning on each asset will only save more and reduce the bite of inflation.

Looking Back to 2021

As we reviewed the trends above and our own progress here at Smart 3^rd Party, we can see that all the above and more are intertwined. The exciting thing is that we believe that TPM and continuing to work with our valued partners, we can continue to grow. While 2020 and 2021 have been challenging, we’re happy to report that they’ve been great years for us.

We’ve worked with many of you to adjust and continue to offer best-in-class maintenance and IT Infrastructure to our end-user clients. With a fantastic team and foresight, we built our business in a way that can weather the storms, allowing us to enjoy such success. Thanks to all of you who’ve been part of this ride.

Next month we’ll give a peek at some of what we think may be coming in 2022.

Summary of Takeaways:

• 2021 was one of the most challenging years across all business categories.
• One good trend was the increased emphasis in Right to Repair which should make it easier and less expensive to perform maintenance in the future.
• Major interrelated challenges included the chip shortage, supply chain issues, changes in customer engagement and the return of high inflation.
• Successful companies including many of our clients, partners and end-users have found ways to adapt.
• For many reasons, the TPM industry is uniquely poised to respond to the needs of our partners and end-users.

Links/Resources:

• https://uspirg.org/blogs/blog/usp/half-us-states-looking-give-americans-right-repair
• https://www.techrepublic.com/article/the-chip-shortage-how-should-your-business-approach-buying-tech-and-components/
• https://www.crn.com/news/networking/cisco-product-bookings-boom-as-component-shortages-continue-to-impact-tech-giant
• https://www.crn.com/news/running-your-business/customer-engagement-strategies-changing-to-meet-new-challenges