Revenue generator

By Lynn Haber  |  Print this article Print


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"I fill out an opportunity sheet with my client's employment information, job description, salary, etc., send it to Ingram Micro, and they find several potential candidates," Sarzoza said. "I call the client and say, 'Pick one.'" The consultant is happy, and so is the client. "As IT consultants, we're the ones in front of the client providing services, and we understand their IT infrastructure," Sarzoza said. "Chances are we're the first ones they're going to call when they're looking to hire an IT manager or technician." If the staffing service grows to about 25 percent of MNIT's business, Sarzoza will be pleased, but he thinks more realistically it will grow to 10 or 20 percent. For MNIT, adding the staffing service was a recent and strategic business-planning decision.

Revenue Generator

While 40 percent of Ensynch's revenue flows from its staffing arm, that figure is shrinking as the company grows its managed services and professional services practices. Nevertheless, Holmquist said recruiting generates an excellent cash flow and will remain a core part of the business. "For smaller projects, in particular, it's the icing on the cake," he said.

Sarzoza said MNIT, incurring no new overhead, earns pure profit when he offers staffing services to his clients. "If they hire someone for $100,000 using my service, I get upwards of 20 percent," he said. Not bad for filling out an opportunity sheet.

As attractive as the money is, Sarzoza wants to keep things in perspective. His is primarily an IT services company with no plans to become a full-fledged employment agency. "For me, staffing is about getting our foot in the door for a business opportunity and helping the client generate money with new technology," he said.

Call it a tool in the toolbox. That's the way Ric Hughes, CEO of IT consultancy Systems Alliance, views staffing services. "When you look at the value proposition of staffing, it's a way to maintain a high-value relationship with the client month in and month out," Hughes said. "Sooner or later, they're going to have staffing requirements, and I want Systems Alliance to be the first company they call." Today, Systems Alliance offers IT services primarily to midmarket businesses and has two regional offices, in Alabama and North Carolina, in addition to a Maryland location. Interestingly enough, the company started in 1993 as a staffing organization placing IT professionals; eventually acquired a software company; and, in 2003, after identifying gaps in the IT services marketplace, positioned itself as an IT consulting company for midsize businesses.

Staffing has accounted for almost 25 percent of the company's annual revenue for the past three years. "In the past, that figure was higher, but our professional services business has grown," Hughes said.


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