What is outsourcing?
Companies that fix and install computers have been around as long as computers have, but only in the last four years has outsourcing begun to take the dominant role that technology firms provide, especially to small businesses. Years ago many service firms focused solely on break-fix work and much of the work done was reactive. Only large firms had the resources to focus on proactive strategies for their technology. Since then much of the hardware and software has become commoditized and the value proposition of any technology solution has been placed not on features or cost but on the tactical. Many service firms are rising to the challenge and going beyond being repair shops and providing the roles of an outsourced CIO, CTO and a fully managed help desk. Where this becomes especially important for small businesses is that this has become another advantage to small businesses along with the lowered costs and learning curve of hardware and software. It’s rare that a small business can afford a fully staffed IT department let alone even one single full timer. Outsourcing its IT operations allows a small business to have a virtual IT department but only pay for what they need and with that also comes a broader skill set from a diverse group of people that are on top of all the latest products and technologies and have established best practices; and are not re-inventing the wheel on your dime.

What should you know before selecting a provider?
Whether you hire on-site staff or an outsourced provider, every business is different and you have to carefully review your own needs before making a decision. There are many options and they can determine the success or failure of your business. Whether you’re hiring an IT services firm or an individual keep the following in mind.

• How familiar are they with your industry?
For example an advertising agency has different processes, software and needs from a financial services firm. Make sure they have knowledge of common software and hardware used in your industry and understand the nature of how a company likes yours works. Working with someone who supports other companies like yours can be an incredible advantage since they can share knowledge on strategy, best practices, software and other solutions which have been proven.

• Do they have experience supporting companies larger than yours?
If you plan on growing your company you want to make sure they’ve seen others through that journey. Lack of experience in managing growth can prove costly at the worst time for a small business. Knowing how to implement solutions that can be expanded on in the future is what you need. Also knowing that a service firm already supports larger companies can allow you to rest easy knowing that their infrastructure is already in place to support your expected growth.

• How are they going to understand your business and what its goals are?
Managing your IT goes beyond the equipment in your office. To have a truly successful relationship a provider needs to intimately know your businesses and always be aware of its pains and successes. You need a provider that’s well versed on various software, hardware and services and know which is best suited for your specific business. They also need to recognize when you’re spending too much or not enough. A successful partnership can produce a relationship which would be similar to a personal nutrionist knowing not so much what’s generally healthy to eat – but what’s good for your specific body to eat.

• How often will you be in contact with them?
Small businesses have the advantage that they can change direction on a dime, and they often do. With that in mind your IT provider should discuss your business goals on an ongoing basis and discuss their relevance to the technology your business uses. For example, if you’re thinking of opening up satellite offices in other cities or countries – this might be the time to start discussing VoIP phone systems which can virtually eliminate long distance call costs, or possibly a VPN network to facilitate file sharing among disparate offices. Items such as new hires or fires should be discussed as early as possible to avoid wasting time and resources on last minute decisions. Technology is still one of the most powerful enablers small businesses have to gain a competitive advantage. Keeping an on-going dialogue with your technology provider will only ensure a successful growing business.

How to decide what’s best for your business.
All small businesses are unique and ultimately your decision will depend on what you’re comfortable with and more importantly what you can afford. With the exception of some financial, retail and health care companies, many small businesses can relate their technology needs to their staff size as shown below.

Bottom Line
Prepare to spend some time interviewing IT Providers before making a decision. Your businesses’ technology is part of your day-to-day operation and selecting the right provider is at least as important if not more so than selecting the right accountant or lawyer. Don’t let your lack of technical knowledge intimidate you into settling for the first apparently good deal. The bottom line is finding a provider that’s interested in your success and can support you well into the future. Hire a provider that is established and has various clients you can call on for reference. Don’t settle for an inexperienced freelancer just because they’re charging a low hourly rate. Independents freelancers can and will leave you at a moment’s notice without any documentation or passwords. They’re often more concerned with plugging the leaky holes and less concerned if the ship is headed in the right direction.

If you’re in an area or building with other businesses your size ask them who they use and see what their experience has been like or be bold and call your competitors to see who they’re using.

Outsourcing your technology services is another great way of driving down costs in your small business and keeping the focus on what your business does best. With a bit of time and patience invested in locating the right partner you will quickly see the return in your next P&L statement.

Gerson Crespo (gerson@degasystems.com) is a founding partner at Dega Systems in New York City a managed IT Service Provider for small businesses. He has been a consultant at Dega Systems since co-founding it in 2001 and previous to that served as a Senior Consultant for Cap Gemini Ernst and Young.