Who should small businesses choose to run their IT?
“I have just been through a week of utter tech hell,” says Hamish Thompson, managing director of Twelve Thirty Eight, a small public relations firm that he founded in 2007.
“At one point I experienced something akin to Stockholm Syndrome, having finally got through to someone at a call centre for one of our ‘service providers’,” he says.
“I’m actively searching for an affordable external support option, having naively assumed that I could do it all myself and with some support from colleagues.”
Thompson’s experience is typical of that of many small firms who know what they need in terms of technology, but are struggling to work out where to turn to get it.
On the flip side of the technological coin is Andrew Banks, founder of marketing agency Squeeze Digital, who makes it sound easy.
“We are a small business and have no servers, minimal-bought software and a flexible set-up,” he says.
“Our staff have better IT provision than most large companies where I’ve worked and almost everything is bought in as a service with a monthly cost.
“This keeps it cheap, robust and more importantly scalable as we grow the business,” he adds.
Horses for courses
The big question then is who should small businesses put in charge of sorting out their IT?
The answer is the ever-unsatisfactory “that depends”, or if you’d rather, “horses for courses”.
IT needs are dependent on a number of factors, including the size of your business and what you need IT for, as well as issues of cost, convenience, reliability and flexibility.
Once upon a time a small firm might have had a dedicated IT person, who would connect up the printers or fix the computer.
There is still a place for such a person in the modern day, according to John McGlinchey, vice-president, Europe and Middle East, at the IT trade association CompTIA.
“In-house IT people bring benefits because they are close to your business – they can recommend the best IT equipment, set up networks and handle security,” he says.
“They can also analyse customer data, optimise websites and even help support programmes like online marketing.”
But the extraordinary speed at which technology develops means one person may not have enough expertise in all the aspects of technology a small business is using.
There is also the practical consideration of what happens when the in-house IT specialist goes away.
If they are off sunning themselves when a problem arises it could hit business operations and effectiveness, something small businesses can ill afford.
What to outsource
To say there is no shortage of companies willing to take over the running of your IT is perhaps the understatement of the millennium.
Small business IT strategies
- 40% say their IT function has grown over the past year; 16% say it has down sized; 8% say it has been outsourced
- 51% say lack of budget is holding back their IT strategy; 36% say lack of staff capability is responsible
- 21% plan to deal with shortfalls in IT capabilities by outsourcing; 23% plan to turn to contractors.
- Most will rely on existing staff skills (39%) or training programmes (29%)
Source: Modis IT recruitment
They are everywhere and offer just about anything, prompting the question of just what should be outsourced?
“I’d say that data management, business development, support, maintenance, sales and marketing are the areas that are ripe for outsourcing,” says Andy Richardson, chief executive officer of software development firm Influential Software.
For his part, Bruce Mair, head of IT practice at interim management firm Alium Partners, thinks “outsourcing is best suited to the commoditised areas of technology such as support, operations and infrastructure”.
“This covers areas ranging from a dedicated helpdesk, to network and voice and data communications,” he says.
But the word on everyone’s lips at the moment is the ‘cloud’.
“Whoever they turn to, one area of focus that small businesses should be paying attention to right now is the cloud,” says Steve Watmough, head of CIO Advisory at professional services firm KPMG.
“It can provide SMEs (small and medium-sized businesses) with access to enterprise applications that may have been beyond their financial reach and is beginning to be a real leveller as organisations can now ‘leapfrog’ the costs often associated with infrastructure and application development.”
But before firms rush into clouds where angels fear to tread (or indeed sit and play the harp), there are some things to be taken into consideration.
“It is tempting for an SME to view the cloud as a simplistic way of achieving reductions in IT costs – but there is a balance that they need to strike,” says Mr Watmough.
“Even with cloud technology, a business needs someone with the skills to manage service-level agreements, contracts and supplier support.”
Furthermore, putting your faith in outsourcing might not be the right move if you have sensitive information that you need to keep to yourself or a unique business set-up.
“Outsourcing is not suited to environments where the systems involved are business critical or have been heavily customised to suit specific business needs and are therefore not easy for third-party suppliers to support cost-effectively,” says Bruce Mair from Alium.
“This model may also not lend itself easily to businesses where data security is critical as it could make information more vulnerable.”
Such data might also be affected by different legal regimes, says CompTIA’s John McGlinchey.
“You need to check where your data is held – if it’s held in the USA for example, it could be seized under the Patriot Act,” he warns.
In the middle ground between dedicated IT staff and outsourcing lie interim appointments.
Interim staff are a resource you can switch on and off as required, can be chosen based on the skills set you need at any particular moment, and should be working to your agenda.
But at the same time they are likely to be more expensive pound for pound than full-time employees and you have to make doubly sure you end up fully owning the technology they put in place for you.
“Interims should be seen as the short, sharp, shock – they are the Stormtroopers of the IT world,” says Influential Software’s Andy Richardson.
He suggests one alternative could be investigating ‘collective IT’ where a geographic business community, such as a business park, can hire the IT staff they need but distribute that resource to all the partners, who are billed hourly.
Stretching the earlier equine metaphor to its limits, one last thing you might consider is an approach of ‘horses for several different courses’.
Rather than pigeonholing your IT person, you might consider putting them to wider use.
“A happy medium for small businesses could be to hire people with IT skills who can also learn your business and operate in a dual role within it,” says CompTIA’s John McGlinchey.
“This is an attractive prospect, particularly for very small businesses, but one rarely considered.”