NFIB

Technology Outsourcing Opens Up a World of Expertise
05/ 30/ 2002

by Tamara Holmes

Most small businesses would be hard-pressed to run efficiently without the benefits of technology. Yet, for many employers, hiring a full-fledged information technology staff doesn't fit into the confines of the budget.

Luckily, there is an alternative.

The main benefit of outsourcing is that it cuts down on overhead. Your business does not have to cough up money for benefits and other employee perks; you simply negotiate a fee that covers exactly what you want done.

The outsourcing of information technology services has become more and more prevalent in recent years, and it is expected to continue to grow in popularity.

According to research firm Dataquest, Inc., technology outsourcing in North America was a $93.8 billion business in 2000. Dataquest projects that the number will rise to $159.6 billion by 2005.

Ironically, part of the reason for the boom in tech outsourcing is the recession that businesses have been struggling to escape.

"In a poor economy, a compelling benefit of hosted solutions is the ability to deploy new technology solutions with little or no capital investment," said Bruce Caldwell, a Dataquest analyst. With outsourcing, you're not tied to the company that is doing the work. If you're not satisfied with the job that's being done, you can end the relationship with little fanfare.

Another reason outsourcing tends to gain popularity during recessions is because tough times force companies to focus on their key money-making initiatives. Outsourcing puts all other aspects of the business in the capable hands of an expert in that particular field.

So what should you expect from a technology outsourcing company?

That largely depends on your business's needs. Some outsourcing companies host software applications and services on their networks. Other outsourcing companies will spend time on their clients' premises, helping to troubleshoot technology problems and streamline operations. And still others use the Web to host business applications and automatically transfer software updates to employees' computers.

The Internet has, in fact, made it easier for technology outsourcing companies to manage the tech processes of their clients. Gartner uses the term business service provider (BSP) to describe the delivery of Web-based services from a technology outsourcing company to a client. While the concept is relatively new, Gartner expects more and more companies to sign on to the idea.

But in a report titled "What Processes Are Good Candidates for BSP," Gartner offers suggestions for business owners to help them determine what kind of outsourcing company they should look for.

Gartner suggests that employers determine whether their needs can be met via the Internet. For example, if you just need someone to manage the software on your network and you have someone on staff who can help people set up their computers or do basic hardware troubleshooting, you might consider an outsourcing company that works via the Internet.

However, companies with evolving needs would probably want a technology outsourcing company that makes house calls. Face-to-face interaction with the outsourcing providers will likely increase the chance that they will understand what you want and get the job done quickly.

Business owners should also take their time. If you want a lot of different things done, it's often better to give an outsourcing company one or two tasks initially, rather than the entire to-do list. That way, you can gauge the company's performance and decide whether they're capable of handling your networks in a way that meets your satisfaction.

The key to a good relationship is trust. When you know what you want and can communicate that to a company that is up to the challenge, you can delegate your technology concerns and focus on your core business.

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