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Managed services: An SMB necessity

Even as SMBs acquire new technologies and business applications, a growing proportion is still frustrated with the escalating complexity and hassles of managing information technology and communications products. Most SMBs don't have the financial resources to confidently select, effectively implement, properly administer and fully utilize their IT and communications systems.

As a result, SMBs generally don't get the best performance and ROI from these systems. Instead, SMBs are at the mercy of technology and at risk of disruptions that can harm their business; they have a hard time leveraging their technology investments to achieve their business objectives. This often dampens their interest in buying more technology.

These issues also cause SMB IT professionals to reevaluate their IT suppliers. Rather than rely on traditional suppliers that provide a set of standard products and maintenance services, SMB IT pros are seeking new suppliers that can help reduce the total cost of ownership of their IT operations. They want their suppliers to work proactively to minimize the risk of IT problems that adversely affect their business.

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A call for managed services
Managed services assume responsibility for administering a specific IT or communications function on an ongoing basis. Whether it's e-mail security, intrusion detection, virtual private networking, storage, desktop or remote management, SMB IT professionals are becoming more comfortable with suppliers who are continuously monitoring their IT or communications operations remotely so that the supplier can quickly resolve performance problems before business operations are affected.

Although we are still at the early adopter stage, managed services is quickly becoming a "must have" rather than a "nice to have" component of IT and communications operations at SMBs. Most market research firms have a double-digit growth forecast for managed services.

IT suppliers and telecom carriers are now offering managed services, but they are still trying to properly package, price, position and promote them. And there are still some kinks that need to be worked out.

Although we are still at the early adopter stage, managed services is quickly becoming a 'must have' rather than a 'nice to have' component of IT
at SMBs.


Jeff Kaplan
THINKStrategies

First, most IT suppliers and telecom carriers have established their managed services as new business units with a separate set of solutions that they are attempting to sell to SMBs in addition to their existing products and services. This approach has failed because most SMBs are still unconvinced of the standalone value of managed services.

Second, most IT suppliers and telecom carriers are packaging their managed services as purely remote solutions with limited customer support. SMBs aren't comfortable buying remote managed services that force them to sacrifice their face-to-face interaction with their suppliers and carriers.

Despite these impediments, a vast array of IT vendors, resellers and telecom carriers have jumped into the managed services market with myriad look-alike offerings. The net result has been a rapid deterioration of the managed services market into a commodity business that threatens to undercut its potential profitability and ultimately the quality of these services.

Know your options

Even as a growing proportion of SMBs adopt a variety of managed security, storage, desktop and networking services, IT suppliers and telecom carriers must carefully evaluate their managed service strategies and offerings to ensure they meet SMB expectations and are financially viable. Here are some tips on how to assess how appropriate managed services are to your organization:

  1. Try managed services on a limited basis with a specific part of your IT operations where you may be having trouble; make sure that transitioning to an outside service provider won't disrupt your business. For instance, a managed storage and backup service can provide valuable benefits without requiring a dedicated effort of internal staff or resources.

  2. Determine which IT functions or tasks you are good at and perform economically, and outsource or out-task the others. For instance, few SMBs have the in-house skills to fully satisfy their security requirements. This is one of the first managed services that SMBs consider.

  3. Admit that it may make sense to leverage a managed service rather than continue to perform an IT task that you think you perform effectively. For instance, managed desktop services have become popular because they continuously monitor and proactively protect the integrity of desktop systems, allowing SMBs to redirect their in-house staff to other more valuable IT tasks.

  4. Thoroughly evaluate the service quality and financial viability of the managed service providers you are considering. The service quality should include the strength of their technical capabilities, responsiveness of their staff, thoroughness of their reporting systems and satisfaction of their customers. It is also essential to examine the managed service provider's financial strength to ensure they can fulfill their promises.

Jeff Kaplan is the managing director of THINKstrategies, a Wellesley, Mass.-based strategic consulting services firm. He can be reached at jkaplan@thinkstrategies.com.

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