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How to Know When to Outsource IT

When is the right time for an entrepreneurial business to outsource IT management to a remote provider?
April 26, 2011
URL: http://www.entrepreneur.com/article/219469
Remote Control: Gartner's Eric Goodness.
Remote Control: Gartner's Eric Goodness.
Photo© Daymon Gardner

This is the sort of question that may not have been worth asking a few years ago, mainly because it was so difficult for small businesses to get on the radar of the large remote IT management providers, which tended to scuffle with one another over the Fortune 500.

"A lot of IT management companies would have said you were too small," says Eric Goodness, research vice president for IT services and outsourcing at technology research firm Gartner. It also might have been too expensive a proposition. "They would have wanted to charge you $500 to $600 per device for remote management," he says.

But in the last five years everything about this sector has changed. Many more companies, including retailers like Staples, office supplies firms like Konica Minolta and SMB specialists like mindSHIFT Technologies have jumped into the game, and costs have fallen sharply. "We were just fielding a survey about this, and I had to stop myself at 522 companies," Goodness says. "The pricing has dropped about 80 percent in the last five years, to about $75 to $100 per device."

Typically, saving money is the top benefit for a small business outsourcing its IT management, Goodness says, but businesses can also improve overall operational efficiency and get access to knowledge about mobile IT security that will help them run better. The trick is finding the right provider based on knowing the most pressing needs of your business.

$50.1 billion: Projected amount businesses worldwide will pay on remote IT management in 2015. They spent $25.6 billion in 2010. Source: Gartner

"You need to understand what kinds of [service-level agreements] you need, what level of automation you want, what kind of security you need and how much mobile device management you need," Goodness says. "Mobile device management is one of the fastest-growing needs for small businesses, and one in which they can easily get in over their heads."

Knowing when to go with a remote provider is the hardest part. Many small businesses may think the timing of outsourcing has everything to do with the size of the company and the total number of employees. While that factors in, the management burden can be different from one company to the next.

"The only rule of thumb," Goodness says, "is that when you decide you need to hire a full-time IT operations and management person, then it's time."