· What drives SMBs to IT outsourcing?

· What holds them back?

· Specific benefits for SMBs

· Outsourcing myths among SMBs

· Challenges SMBs face in Outsourcing

· Conclusion


Small businesses have always confronted with addressing their IT necessities. The lack of resources – be it staff, budgets or managing resources – have determined SMBs to start exploring the offshore outsourcing option. But start ups and small enterprises have specific needs that few outsourcers can address correctly. Affordable IT solutions that are easily to install and configure, service/support requirements and, most of all, integrated ready-to-use methodologies and tools are the most critical demands of an SMB willing to outsource its IT department.

What drives SMBs to IT outsourcing?

The SMB market is to eager to find affordable IT solutions that are easy to use. Just as important, however, is are the requirement that address SMB deployment issues, operational challenges and service/support requirements. SMBs want IT solutions that are easy to install and configure, and require minimal customization and integration. More importantly, they demand responsive and reliable after-sales service and support. SMBs don’t take customer service and technical support for granted. For many small companies, a solution provider’s technical support isn’t merely a convenience; it’s a business-critical IT service, because of their resourceconstrained IT staffs.

SMB business specific challenges and “pain points” determine specific needs for small enterprises. Most outsourcing providers are specialized on the early adopters of outsourced software services – large companies multinationals. Therefore there are few specialized providers for SMBs and able to adapt to their business model and needs. Yet small-sized, SMBs are still technology-intensive businesses that require great attention from outsourcing providers. Small businesses should choose outsourcing their IT to those providers with

experience in managing SMB projects.

What holds them back?

At first glance, this key issue can seem redundant with the ones in the previous paragraph. However, we often see a contradiction between SMB IT requirements and how SMBs buy technology. For example, SMBs cite tight IT budgets as an inhibitor for adopting technology, but yet they choose not to use vehicles such as “leasing” to work around limited IT budgets. Creating the right IT solution for SMBs requires a clear understanding of their technology and business needs.



· Cost Reduction

· Access to better skill sets, depth of experience

· Access to the best / most current technologies

· Minimizing downtown

· Increasing user productivity

· Reallocating personnel to more strategic activities

· Convenience outsource 

SMBs prefer IT solutions that have simple and straightforward pricing (the requirement), but they need the flexibility to consume technology in modular components that can be extended when required (the behavior).

It is also important to understand SMB preferences including, but not limited to, brand loyalty, bundling and packaging, and service delivery options, such as outsourcing and software as a service, as SMBs upgrade and expand their IT environments. Yet, there are still issues that have prevented SMBs to start outsourcing their IT department until recently. And these are:

Affordability: Recent market figures point out that still 40% of SMBs state cost as still the strongest reason preventing them from outsourcing. But offshoring proved that in most cases the outsourcing option will be significantly cheaper than hiring in-house staff – since manpower or infrastructure costs are lower at the vendor’s location.

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