In business school, one of the first lessons taught to students is the lifecycle of a business. Obviously, you don’t just open your doors one day with a fully trained staff and customers. The growth and evolution of a business follow similar patterns:
Stage 1 – Seed and development
Stage 2 – Startup or launch
Stage 3 – Growth and establishment
Stage 4 – Expansion
Stage – Maturity
Stage 3 is critically important and also an incredible challenge for entrepreneurs because it requires the precise division of time between an increasing range of demands. The concept of the business has been proven, the potential for even more revenue exists, but day-to-day the owner is still wearing a lot of hats.
The owner is usually still heavily involved in managing the demands of the increased revenue, attending to customers, monitoring competition, and being able to recruit are more important than ever.
It’s at this stage that bringing on smart people can be an asset for the company and at the same time provide some much-needed relief for the owner. Unfortunately, Stage 3 annual budgets might not allow for top-tier talent, especially when it comes to technical services.
Does this spell doom?
Certainly not, especially when you consider the entrepreneurial “ace up the sleeve” of bringing aboard outsourced IT solutions.
The benefits of outsourcing technology are numerous but come with a unique set of challenges. First of all, the talent pool a business owner can pull from becomes exponentially larger.
No two businesses are the same, and this becomes especially true when you look at internal operations and technological infrastructure. So based on your unique business model, and an even more specialized set of technological needs – what are the odds local talent will be able to handle all your needs effectively?
It’s possible, but let’s say, unlikely.
Recruiting takes time, salary negotiations take time and can be expensive, training takes time and IS expensive. We live in a “need-it-now” kind of business environment, sinking too much time into recruiting can leave other areas of your business under-served.
Outsourced IT solutions can help bridge the gap between sourcing high-quality talent quickly, but not needing enterprise-level budgets to make that a reality.
Understand The Risks
Most businesses don’t survive until State 3 of the lifecycle by making decisions whimsically. Similarly, outsourcing technology for your company requires research, strategy and perhaps most importantly, trust in your provider.
Letting Go: For some entrepreneurs, the loss of managerial control over decisions can be hard to cope with. Signing a contract for a separate company perform a vital function can be anxiety-inducing. Will the vendor perform their tasks with as much passion the business owner? Will they hold their performance to the same standards that your customers and your staff have come to expect?
- Solution: This is a serious concern and a very important one. There’s no “silver bullet” answer either, many business owners have made the mistake of hiring a company that over-promised and under-delivered. This is where research and consultations come in handy for business owners. Make a list of questions that are most important to the ongoing success of your business as they relate to technology. If the outsourced candidate can’t answer each question to your satisfaction, they are not the right provider for you.
Bait-and-Switch Pricing: Outsourcing will involve costs, but your monthly or annual invoice should never surprise you. We’ve heard plenty of tales of disgruntled customers who were charged for services they didn’t even know they were receiving.
- Solution: This is all in the contract. Are you being quoted with a “fixed fee” for or being quoted with “time and materials” language? Understanding what IS and IS NOT included in the service agreement can same a lot of surprises when it comes to reviewing your monthly bill. Some items you will want a clear understanding about regarding where the responsibility falls will be; hardware, software licenses, on-site support, after hours or weekend and holiday rates, and travel time for service visits.
Security and Confidentiality Concerns: We don’t live in a time where data breaches go unnoticed or discussed anymore. This can potentially be one of the biggest challenges for a considering outsourced IT solutions. While many people wouldn’t be able to name all three of the “big three” credit monitoring companies, the publicity that Equifax’s recent data breach received was heard across the modern world.
Since sharing proprietary customer data, trade secrets or other sensitive information to a third-party is inherently risky trusting the outsourced provider becomes priority number one.
- Solution: Online reviews exist for a reason. Use them. A company can talk about themselves until they are blue in the face, but reviews from other clients may reveal holes in that picture.
If your company operates in an industry with specific compliance regulations, make sure that any candidate has experience with compliance in this area. Remember, regulators will hold the business accountable in the event of a worst-case-scenario. If medical information or financial information is breached while in the IT provider’s care any fines will be coming back to the business, not the vendor.
Stop Looking For A “Vendor”
From our perspective, the word vendor does not accurately describe how we feel the relationship between a business and an outsourced IT services provider should be viewed.
Customers get single serving snacks and sodas from a vendor. Business owners should be for a technology partner. Looking at the relationship as a collaboration rather than a buyer/seller situation changes the conversation dramatically. A high-quality IT services provider will consider each client as a collaboration where each party has shared goals.
An article in Data Center Journal framed the idea like this:
Overcoming these mistakes requires changing how we think about our outsourcing relationships—it requires doing away with the term “vendor” completely. It necessitates explicitly and clearly articulating desired and measurable outcomes on both sides, frequently a difficult challenge. It also requires client self-awareness and an honest evaluation of the client’s readiness to participate in a progressive, outcome-based relationship.
Keep Business Cycle of Life Going
Remember our discussion at the beginning of the article about Stage 3? Going about it intelligently means that the owner will start to become more of the “head” of the organization rather than the person who has to do everything!
Entrepreneur describes the end of Stage 3 like this:
While you’ll still be on the front lines often enough, you need to be aware of how your expanding and highly qualified team is going to be taking over a great deal of the responsibilities that were previously tightly under your control. It is your job now to start establishing real order and cohesion as you mobilize the teams according to clearly defined and communicated goals.
Effectively recruiting outsourced IT partners means that the business will be better equipped to continue to thrive into Stage 4 and beyond. And maybe, just maybe, you’ll even have enough time to take that vacation you keep talking about!
If you’re in the market for a technology partner that cares about the success of your business as much as you do, consider scheduling time to talk with Continuous!