How To Begin IT Management Outsourcing for Small Business

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Written by Joyce Ann Danieles

Contents

 

Due to limited operating budgets, most small businesses experience difficulty meeting their information technology (IT) requirements. They also struggle to keep pace with technological advancements because they need to prioritize core capabilities for enterprise growth. 

As one of these small businesses, you can adopt IT management outsourcing to ease your technical workloads. You can also optimize IT expertise while reducing costs. 

Ensure your outsourcing investment’s success by discovering effective ways to hire and manage the right IT management provider through this article. You will also learn the advantages of this process for your small business.

 

Getting Started With IT Management Outsourcing

Getting Started With IT Management Outsourcing

Statista reports that revenue in the IT outsourcing segment is expected to reach $395 billion in 2022. Increased efficiency, reduced costs, and heightened focus on core competencies are the primary reasons businesses outsource IT functions to third-party service providers.

Small businesses commonly comprise fewer than 500 employees–and often far fewer–and generate less annual revenue than corporations. Their limited human resources and infrastructure hinder them from working on primary business development initiatives. As a result, most small businesses turn to a third-party service provider to effectively perform their non-core tasks at a low cost.

If you are a small business planning to outsource IT management, you need to know how to establish cooperation with your potential partner. Follow these seven steps for a more effective IT management outsourcing process.

1. Assessment

According to Clutch, 90% of 1,003 surveyed small businesses intend to outsource some of their business tasks in 2022 to save time, expand, and work with experts. If you are one of these entities, your first step in outsourcing is to conduct a thorough assessment of your needs. You are developing a project plan to ensure your outsourcing investment success.

Identify your goals, necessary resources, marketing strategies, and financial projections for outsourcing your IT functions. Having a clear and concrete plan is important to prepare for and respond to potential problems that you encounter along the way.

2. Proposal

Once you have a solid plan, launch a campaign requesting information, proposals, or quotations to identify a business process outsourcing (BPO) company that can best match your needs. Select at least three potential contractors that offer the best bids for your IT needs.

Carefully review a proposal detailing the contractor’s complete and concrete action plan for handling your IT tasks. Consider technical expertise, workforce size, market reputation, proven project management experience, and work etiquette for choosing your potential outsourcing partner. Then, narrow your selection down to one contractor.

3. Due Diligence

After picking a partner for your IT management outsourcing process, collect and evaluate more information about this provider’s capabilities to establish a structured relationship. In this phase, investigate and confirm the details stated in the proposal of your selected BPO provider.

Audit financial records before signing a transaction with another company. In doing so, you will learn about potential investment risks and ways to mitigate them.

4. Contracting

Formalize your partnership with a BPO provider after completing all necessary assessments. Your long-term outsourcing relationship will become official through a written agreement.

Both parties will discuss, negotiate, and finalize contract terms and conditions during a physical or virtual meeting. Sign a deal that can serve as a master service agreement, service level agreement, or non-disclosure agreement.

5. Transition

After sealing a contract, start moving resources and assigning responsibilities to your BPO provider. This stage marks the official launch of your IT management outsourcing.

Explain to your partner its duties and daily tasks. Detail the rules and regulations surrounding your IT-related activities as well. 

6. Governance

This is the longest phase of your IT management outsourcing. It involves managing your BPO provider but with minimal supervision. Make sure that the contractor remains committed to delivering quality and timely performance while working on your routine IT tasks.

Moreover, maintain a good relationship with your third-party service provider throughout the contract duration. Ensure regular communication with your partner to avoid potential conflicts and misunderstandings.

7. Agreement Completion

After completing a project, your BPO provider must return resources and responsibilities to you. This step marks the official conclusion of your working relationship. You both will conduct surveys or discussions on the positives and negatives of your partnership to underpin future efforts.

However, you can still choose to renew or extend a contract with your outsourcing partner if they have exceeded your expectations and met your standards. You just need new or extended contract terms to proceed.

 

5 Practical Steps in Hiring an IT Management Outsourcing Provider

5 Practical Steps in Hiring an outsourcing provider

Learning about positive business process outsourcing results is critical in deciding whether to pursue an IT management outsourcing process for your small business. Once you decide to continue your outsourcing plan, know how to select the right third-party IT provider.

Add these five effective ways to hire an appropriate IT outsourcing company:

  1. List Service Requirements. Start with identifying and listing your technical requirements. This technique also helps you understand the extent and boundaries of your IT management outsourcing needs and set realistic expectations and budgets.
  2. Request Bids. Release a request for proposals notice publicly to seek potential providers of IT support. Shortlist at least three bidders whose services you think match your requirements. Narrow it further to one if you’re certain about an exact match.
  3. Research the Potential Partner. Investigate the provider that you find fitting for your business. Check its market reputation, proven IT management experience, and work strategy. Your findings will help you decide whether to proceed with the partnership.
  4. Start the Qualifying Process. If everything pans out, contact your chosen provider to discuss your needs and how they can address them. Prepare questions that will confirm the provider’s ability to meet your needs. Discuss varying service packages and prices until you develop a package that suits your budget. 
  5. Negotiate the Contract. Finalize the agreement by conducting a formal meeting with your chosen provider. Review the contract you and the provider have drafted before signing it to seal the deal. You can now officially commence the IT management project with your BPO partner.
 

Benefits of IT Management Outsourcing for Small Businesses

Businessman holding a modern tablet analysing return on investment for outsourcing

You’ve learned about the steps in kicking off your IT management outsourcing process. As a small business with limited resources and funds, know what advantages you will gain from making an outsourcing investment before taking the risk.

To further convince you to start your IT management outsourcing process, here are five benefits of hiring a BPO company:

  1. Access Cutting-edge Technology. A third-party IT service provider uses cutting-edge equipment and technology. Partnering with them allows your small firm to access secure routers, firewalls, servers, and modern PCs. With business process outsourcing, you can meet your technological needs without buying expensive equipment.
  2. Tap Into IT Expertise. A BPO company regularly trains its IT professionals to keep pace with the ever-changing technology landscape. Without paying large sums, you can tap into this expertise by executing an IT management outsourcing process. Many IT specialists offer their services at low costs from offshore or nearshore countries.
  3. Strengthen System Security. Due to cyberattack concerns, every organization prioritizes cybersecurity. BPO providers use rigorous IT security procedures to protect internal and client data. Expect an IT outsourcing partner to protect your small business online data and help with incident recovery. 
  4. Reduce Operating Costs. IT management outsourcing reduces operating costs because you don’t require an in-house team or expensive IT equipment. You can use your savings to fund emergencies or support your core functions. This advantage is why BPO is a growing business strategy for small businesses.
  5. Prioritize Core Processes. IT services are time-consuming and repetitive tasks that can hinder your growth if not properly managed. Employing a BPO provider can help handle these labor-intensive activities with high proficiency but lower service costs. Now you can focus on improving your core business functions to grow further.

After knowing everything about what business process outsourcing is in the IT industry, how to employ a third-party service provider, and why this strategy is beneficial to your small business, you are ready to move forward in your technical strategy. Do not hesitate to revisit this page to ensure your IT outsourcing investment success.

 

The Bottom Line

Adopting an IT management outsourcing process requires careful planning and evaluation before formal implementation. As a small business with limited resources and funds, you need to learn and follow the steps in hiring and managing your BPO provider before taking the risk.

Knowing the outsourcing benefits, such as cost savings, expert and high-tech optimization, and enhanced security, is also vital to an informed decision to pursue a BPO partner. These factors help your small business achieve growth while reducing operating expenses for critical IT functions.

If you are looking for a third-party service provider that fits your IT and budget needs, you can tap into highly skilled technology teams and advanced systems from Unity Communications. Contact the Inc. 5000 company to get a quote now.

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