Happy Monday, everyone. This is an abbreviated work week. This show is off Thursday and Friday. As it is Monday, let’s look at new market data.
Americans are increasingly intolerant of price hikes, causing businesses to lower prices and entice shoppers. This consumer resistance to price increases may contribute to disinflation and normalize price increases. The resurgence of fast food price wars and competition in the travel industry highlight the price sensitivity of consumers.
According to a study by PagerDuty, 59% of IT leaders report an increase in high-priority, customer-facing digital incidents over the past year. These incidents hurt companies’ brands and revenue streams, with 90% of IT leaders believing outages have reduced customer trust. The rise in incidents is attributed to increased complexity, rapid expansion of digital services, and insufficient investment in IT infrastructure maintenance.
Research from Sage highlights that medium-sized enterprises (SMEs) are increasingly looking to the channel for trusted advisory support in embracing digital services and AI. Over half of IT resellers have reported an increased role in providing strategic advice, focusing on using AI tools and analytics to stay informed and flexible. Partners are prioritizing the latest technologies to improve agility, optimize business processes, align tech solutions with business goals, and offer insights on industry trends.
Labor scarcity is becoming the new normal in the economy of the 2020s, with implications for corporate strategy, growth, and inflation. A new report from the McKinsey Global Institute warns that labor shortages, which emerged after the pandemic, are likely to persist. Businesses will need to find ways to maintain output with fewer workers, which poses a risk to economic growth. The report also highlights that this is a global phenomenon, not just a temporary blip, as the aging Baby Boom generation leaves the workforce. Higher wages can be expected in sectors with acute labor shortages, and the adoption of generative AI may help boost productivity in the face of persistent worker shortages.
The Russell 2000 is down .63% the last five days and remains down -2.7% for the year, and the S&P 600 is down point six percent the previous five days, down two point six percent for the year.
Why do we care?
There’s continued strong value in the core IT services offering – helping customers with their technology needs with strong advice and a steady hand to navigate rough waters. I’d argue that there is going to be less of a tolerance for increase cost without a direct link to business value. Are you driving revenue with IT?
Automating incident response and improving coordination among IT teams were noted as valuable solutions to reduce the prevalence and cost of incidents. I want to extend that – automating work to reduce costs is the key value… and to go further, expand the measurement into also helping employes not only be more productive but also removing stress or excess burden, because as the data shows, keeping people is going to be criticially important. Sure, focusing on increasing productivity is good, but what’s great is helping those workers have better overall satisfaction with their jobs. Retention is the key, as churn is expensive.