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SMBs and the Outsourcing Decision

T functions most often outsourced by small businesses include virus protection and security, e-mail and messaging, accounting and payroll, and data storage and backup. However, some companies may be wary of giving an outsider access to sensitive information as it relates to customers, employees and financial information.

Almost 60 percent of small companies' information technology is outsourced to third-party providers -- and a number of whom are in the Virginia, West Virginia, Maryland and Pennsylvania quad-state area -- the largest of which are listed in the Quad-State Business Journal's "2007 Book of Lists" under Computer Dealers/Networkers.

As with many outsourcing decisions a small business owner must make, the key question relates to whether or not the IT function is within its core competencies; does it lie within the IT staff's main areas of strength like desktop support? If not, and depending on the complexity of the computer system and the various applications used to manage the business, then outsourcing may be the answer.

Cost considerations also come into play. Is it less expensive to contract out a certain number of hours of IT support a month or a year than it is to hire someone full time, and is that individual easy to find? A lot depends on the company's budget, as well as if backup support needed on a consistent basis.

Sensitive Information
IT functions most often outsourced by small businesses include virus protection and security, e-mail and messaging, accounting and payroll, and data storage and backup.

However, some companies may be wary of giving an outsider access to sensitive information as it relates to customers, employees and financial information. In that regard, only 16 percent of companies with between 50 and 499 employees outsource technology security, according to AMI-Partners, a New York City consulting firm.

However, keeping up with the latest and greatest in security software and procedures and more importantly, security threats, may be a full-time job in itself. That function may best be handled by an outside vendor.

Dealing With Outside Vendors
A recent article in the Wall Street Journal asked Paul Horowitz, head of PriceWaterhouseCoopers outsourcing practice, for some tips in signing on with an IT vendor. Here is what he said:

Have an exit strategy if things don't work out.
Meet the people from the actual team that will be doing the work.
Do a thorough check of references supplied by the IT vendor.
Have in your files a second choice vendor if the first one doesn't work out to your satisfaction.
Be careful of scope creep where work requirements change or are added to the initial work plan.
Let your current employees know you plan to outsource some or all of the IT work.
Make sure your data will be protected with a plan for security.

By Peter Heerwagen
Quad-State Business Journal
07/23/07 8:39 AM PT

 


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