As large and small firms ramp up their IT spending, they are faced with the perennial decision of what to handle internally and what should be outsourced.
However, this is really a multi-part decision-making process. First is the identification of specific project needs in terms of hardware, software, human capital and implementation. Second is the decision of whether to outsource rather than handle various components or functions internally, and the third is the selection of the appropriate vendors and partners for various stages of the project.
Ask most business owners to name an IT support firm and most will immediately mention one of the larger national firms. However, ask them to identify the support firms they are actually using for their projects and you will likely get a very different list that includes everything from the big guys to boutique development firms, product-specific consulting and mom & pop local support.
Why the big variety? And which are most appropriate for your specific business needs?
There are a number of reasons why a given firm might select many vendors as opposed to working with just a single provider: cost, expertise, size, or relationships. As valid as these reasons are, unfortunately the most common reason is the simple lack of a strategic plan toward identifying and fulfilling IT support services.
Let’s examine the options in terms of the types of IT provider alternatives, and discuss their advantages and disadvantages to arrive at a better understanding of when each should be used, based on your organization’s specific needs.
One of the first options for many business owners as they seek IT assistance is the hardware or software manufacturers themselves. Companies like HP, Cisco, Microsoft, PeopleSoft/Oracle and others who provide a product will often provide the people and the necessary technical support to install and configure that product.
This strategy has several advantages: manufacturers are generally the experts on their own products, all warranty requirements will be met and substantial discounts can be negotiated when combining product and service purchases.
The biggest disadvantages to this option are often price and the availability of their people to provide direct support to smaller accounts. In addition, the support period is typically brief and transaction-based, without the consistency the business owner may want for longer-term support.
National Consulting Firms
There are a number of firms that, although manufacture no product, have gained a reputation as experts in the IT consulting space across a number of products. EDS, Perot Systems and Accenture all provide a solid array of consulting and support models for product-specific engagements, as well as longer-term business process and personnel direction.
As with manufacturers, price is often the greatest challenge with this segment. In addition, as the ongoing demand for expertise in a specific skill set increases, the provider may lack adequate bench strength to provide the necessary level of support in a timely manner.
Value Added Resellers
Companies such as CompuCom and Insight offer many of the same advantages as the larger manufacturers, but generally at a lower cost. These VARs can also provide a variety of different product types combining hardware, software and services on a single invoice and leveraging each to provide businesses with numerous options and solid savings.
However, as these firms lie between segments, they have their own weaknesses. First, VARs focus primarily on product sales rather than staff implementation, leading in many cases to a transactional focus rather than a business process management focus.
Additionally, due to the economic changes in the IT market since the '90s, most have reduced their footprint, limiting service support to specific major metro areas. For engagements outside these areas, they must often partner with other firms, increasing costs and decreasing their control over delivery of the services.
Many IT staffing organizations identify and provide personnel within a defined niche, rather than maintaining a specific inventory of consultants. Because of this recruitment capability, they can accommodate a range of client requests, including those for short periods or spikes in demand.
National firms offer the additional advantage of providing consultants across geography, which may make them attractive for widespread “feet on the street” engagements.
However, staffing is only a portion of most traditional project engagements, requiring clients to identify other vendors for physical hardware and software as well as maintenance and other support services.
Boutique, Product Specialty and Mom & Pop
There can be a number of advantages to utilizing local support firms. Most of these firms are relatively small and can therefore offer a more customized solution and be more flexible around individual needs, even for smaller clients.
Boutique development groups may have expertise not only in development tools, but also in suggestions on how best to implement their end product based on experience.
Product specialty firms that offer support on only one specific product (Great Plains, Lawson, SAP, etc.) can often provide practical expertise specific to your business type or need.
Finally, the mom & pop firms fulfill an important niche supporting requirements that might be unacceptable to large firms due to duration, requirements or price.
The biggest disadvantage to this group is the limited footprint, limited access to talent for large projects and diversity of services, as well as a lack of partnership and ability to grow should your firm have additional requirements.
What’s the best answer? The key is to evaluate your short-term and long-term needs, the desired mix of hardware/software/consultation, time frame and budget and then use that information as a guide.
Just as most networks today are a heterogeneous mixture of several operating system and hardware platforms, a good support strategy should integrate the most appropriate mix of different IT providers to take advantage of the strong points each offers.
Dan Cobb, a former CIO, is vice president, National Sales, for Kforce Professional Staffing, where he previously served as director of the National Infrastructure Operations Center. He can be reached at firstname.lastname@example.org.