What’s Really Holding Tech Leaders Back in 2025

Everyone’s planning, prioritizing, and piloting. But when it comes to real transformation, many tech and services teams are stuck. Not because they don’t know what to do—but because they can’t get it done. 

Execution—not strategy—is the biggest gap heading into Q2.

This month’s TSIA Tech Trends breaks down four execution gaps stalling progress across professional services, managed services, support, and performance strategy. Backed by new data and benchmarks from TSIA’s latest ebooks, each section highlights what’s holding teams back—and what the top performers are doing differently.

💼 Professional Services: Strong Margins, Weak Models

Professional services teams are hitting financial targets, but they’re not hitting transformation milestones.

While orgs have improved their margins and matured operationally, very few have made the leap to scalable, recurring revenue models. The result? Long-term strategy is often stalled by short-term structure.

“You must meet today’s financial and operational expectations, but your professional services strategy must include self-sustaining funding for transformation initiatives.” — Bo DiMuccio, State of Professional Services 2025

What’s working:

• 85% of Professional Services orgs now report formal P&Ls

• Net operating income is up 18% over two years

• 56% have services engineering teams supporting scalable innovation

Where transformation is stuck:

• Recurring revenue is flat at 3% (median)

• Most PSOs haven’t transitioned to outcome-based or subscription models

• Only 3% of revenue comes from value-based pricing, despite 61% of teams having PS-specific sales support

• Strategy and delivery remain disconnected in many orgs

Teams aren’t resisting change—they’re stuck between legacy models and the need for scalable value creation. To move forward, Professional Services leaders must unify pricing, packaging, and delivery to support long-term outcomes—not just utilization.

👉 See how leading Professional Services teams are breaking free from project work

🛠 Managed Services: Outcomes Promised, Outcomes Missed

Outcome-based delivery is the future of managed services, but most providers still operate like it’s 2019.

Despite increasing customer demand for measurable value, too many MSPs rely on entitlement-based pricing, siloed delivery teams, and legacy KPIs that track effort—not results. The outcome is a persistent execution gap between what customers want and what providers can prove.

“Customers now demand pricing models that directly align with their business goals and demonstrate tangible value.” — Luke Ronkowski, State of Managed Services 2025

The reality:

• 57.5% of MSPs are still in the early stages of developing customer success programs

• Only 7.6% can consistently identify and close expansion opportunities

• 63% report no formal AI use—even as automation and predictive analytics redefine service delivery

Top performers are re-engineering how they operate—structurally and strategically:

• Cross-functional alignment is replacing silos to ensure shared ownership of outcomes

• Customer success is becoming embedded in delivery, not an afterthought

• Telemetry and automation are being used to drive proactive readiness and real-time visibility

• Pricing models are evolving—from entitlement-based to subscription and value-based strategies—focused on actual business impact

To compete in this environment, MSPs must go beyond reactive fixes and build operating models that are designed to prove value from day one. That means measuring the right things (like CSAT, deflection, and outcome alignment), redesigning service engagement, and positioning automation as a foundation—not a feature.

👉 See how leading teams are evolving their Managed Services strategy

🤖 Support Services: GenAI Can’t Fix What Knowledge Management Broke

The AI hype cycle hit support teams hard in 2024. While many raced to pilot solutions, few made meaningful progress. Only 5% of organizations reported scaling proven AI capabilities, and 39% hadn’t defined any AI productivity goals in their operating plans.

“Moving into 2025, the pace of transformation has accelerated, creating a divide between those leveraging AI and those falling behind.” — Vele Galovski, State of Support Services 2025

So what’s causing the disconnect?

The real blocker is knowledge.

Most organizations lack the foundational infrastructure needed to support reliable GenAI at scale. It’s not just a Knowledge Management (KM) challenge—it’s a business model flaw.

Here’s what’s missing:

• Structured KM: Few orgs have governed, searchable, up-to-date knowledge bases

• Taxonomy and tagging: Without standardized content classification, GenAI can’t deliver relevance or accuracy

• Clear AI KPIs: 39% haven’t defined any outcomes tied to their AI efforts

• Scalable support design: Most models still scale headcount—not self-service or outcomes

To close the readiness gap, support leaders must focus on three core capabilities:

1. Leverage AI in Support Operations: Use GenAI to speed up triage, guide issue resolution, surface sentiment, and support predictive insights—but only if KM maturity is high

2. Optimize the Support Delivery Model: Link cost, value, and CX through metrics like CSAT, deflection, and cost-per-interaction

3. Deliver Integrated Omnichannel Experiences: Use digital intent signals to direct customers to resolution—not just more options

Support organizations can’t scale GenAI until they stabilize the KM foundation. But, once that’s done? They can improve efficiency, elevate the customer experience, and deliver measurable value—all at once.

👉 See how AI-ready support orgs are creating real value

📊 Try TSIA Performance Optimizer: Benchmarking Built for Action

Benchmarking shouldn’t be a black box—or a slide deck.

The new TSIA Performance Optimizer turns traditional benchmarking into a powerful, digital experience. It’s free to try, easy to use, and gives you real value from day one.

You’ll get:

• A diagnosis of where your operations are strong—or falling behind

• Prescribed initiatives tailored to your biggest challenges

• Prioritized actions so you can focus resources where they’ll have the most impact

• Access to benchmarking and expert-backed research from TSIA

Whether you're benchmarking support, professional services, managed services, or education, Performance Optimizer gives you a real-time view of where you stand and where to go next.

👉 Start your free assessment today

Get The Data You Need To Make Smart Decisions

The TSIA Portal empowers executive leaders like you with the data, insights, and research you need to achieve real results. If you haven’t already done so, create your free executive account today.

Did you find this article and its resources helpful? Subscribe now.

TSIA website | LinkedIn | X (formerly known as Twitter) | YouTube