9 Tips for Outsourcing Your Small Company Computer Ops

When a small company needs information technology or IT help, it typically does one of two things:

  • It brings in a consultant to help it through the emergency at hand.

  • When it gets big enough, it hires a jack-of-all trades IT person.

Other than that, most small businesses hobble along as best they can.


But now, if you run a small firm (say, under 200 people), there's a class of service provider that specifically caters to you. The best ones can do everything an internal IT staff does for the big firms — set up your network, maintain your IT operations, provide help desk services, get new workers up to speed, and even help you move when that need comes up.


This kind of service provider typically works on a monthly fee basis. Why pay for a service every month when you only really need it when something breaks? Because when your email goes out or that order system stops working, your business may lose deals and money. Having somebody to do preventive maintenance on your network and computers is like getting the oil in your car changed on a regular schedule. Who knows why it works — it just does.

Info Partners, a Silicon Valley-based outsourcing service provider, has served as the "full-blown" IT department" for venture capital firms, life science companies and professional operations such as accountancies and law firms, for 11 years — all based in the Silicon Valley region. (Most small service providers that act as external IT departments for small businesses focus on companies located where they are.)

In this article, Will Luden, Info Partners president and CEO, and Keith Costas, director of engineering, share their tips for selecting the right service provider and putting them to work. They also divulge their typical plan for how to move a small company's IT and phone services when it changes offices.

–> TIP #1: Think you need to put together an RFP before you start shopping? If you're small, don't worry about it yet.

Of course, this means that getting competitive bids will be tougher, since all candidates will probably have a different perspective on the services you need. You may be able to pull together your request for proposal with the help — if not the enthusiastic cooperation — of the first vendor you meet with.

That's the company that — if they're doing their job right — will help you sort through what it is you need.

Info Partners takes its prospective clients through a "laundry list." According to Mr. Luden, "We just walk through their business and ask them, ÔWhat do you do during the day? And so you have people connecting from here and what are the things that are important to you?' In a space e of a half an hour they can explain to us everything they need to know to get a proposal."

The only time Info Partners sees RFPs, said Mr. Costas, is when the work is for a local government agency.

–> TIP #2: Pricing shouldn't be a huge mysterious process full of techie mumbo-jumbo.

The vendor will have to establish some key fundamentals about your business and its IT practices. For example, what size is your network? (Is it two computers or 50?) How mission critical are the applications? (Can it go for a couple of days without the network running?) Is everybody working from the same place or are there remote workers too? How self-sufficient are you? (Do you call every time you get the "equivalent of an IT hangnail?"

Once that's established, the service provider should be able to give you a bid that covers your monthly service baseline.

For a standard 10-person office that isn't particularly needy, you can expect to spend around $1,000 a month with Info Partners.

–> TIP #3: When you're trying to figure out how to handle your IT services, go beyond choosing from a personal referral.

Those referrals are good — since it'll provide you with somebody to call as a starting point. But after that, ask yourself these questions:

  • What do I do in my business and how does that affect what's critical about the IT?
  • What's my style of management?

Why are these important? Because it'll help you figure out what the IT for your company should look like.

For the first question, in the case of a venture capital firm, maybe the critical application is email — available anytime, anywhere without ever going down. That means the infrastructure your service provider builds needs to address those requirements. On the other hand, if you're in a laboratory that needs to tie its technical equipment into the network, that calls for a different kind of IT setup and support.

The second question addresses how much you're willing to invest in IT and what structure it should take — proactive maintenance or firefighting. You may prefer to spend money only when it's absolutely essential. So IT on a retainer basis may not be what you want.

Next, find out if the vendors you're considering have worked in your vertical market — law, venture capital, architecture or engineering, fast food, and so on. Get references and follow up on them with phone calls.

Also, do face-to-face interviews with the personnel you'll be working with to find out if there's a personality match, as well as a technical match.

–> TIP #4: You don't have to expect to sign a year's contract.

Info Partners signs 90-day rolling agreements. That's the amount of time it takes the company to redeploy its people to new work. Until you say otherwise, the understanding is that they'll continue providing services for the next three months.

Client turnover is low for Info Partners — out of a hundred clients, it has lost three in the last couple of years.

–> TIP #5: Outsourcing your IT isn't the same as using IT consultants.

Frequently, IT consultants are the people you call on when there is a fire. Then two hours or two days later, they leave. A service provider is somebody who will be there day in and day out, presumably taking proactive measures to manage the network, handle the backups, be prepared to do data recovery. "It is a feather in our cap when [the client] looks at us and says, ÔIt was really boring last month — what did you do?'" explains Mr. Costas. "Our job was to make jolly well sure that you were bored from an IT standpoint."

–> TIP #6: Your outsourcing service provider doesn't have to do it all. Consider one for handling just your satellite offices.

One of Info Partners' clients is a large law firm based in Long Beach, CA with a fairly large office in San Francisco, which it supports. Most of the work these smaller providers do is geographically located, which means you can have IT coverage without putting your IT staff on the road or without turning a non-techie employee into an ad hoc IT person.

–> TIP #7: When the time comes to consider hiring a tech person for your staff, bring in your service provider to help evaluate that candidate's tech skills. But also, look beyond the tech skills.

If you're not technical, how do you know if the person in front of you has the tech smarts you need? The problem is that if you hire the wrong person, you won't know for many months. In the meantime, he or she could be gutting your systems out of sheer ignorance. Not good.

Mr. Luden says it's easy to be fooled. It happens to them and they do it for a living. Info Partners gives verbal tests, written tests and practice problems.

A simpler approach is to bring in somebody who is a proven techie to evaluate the technical skills of the candidate. That can be done through conversation. After all, the basics of network operation aren't really disputable.

But you also need to go beyond technical skills. What kind of people skills does the candidate in front of you have?

At Info Partners, Mr. Luden pulls out the "angry client" problem. That's where he acts like he's out of his mind and starts demanding something that's just plain wrong for the network. (In other words, no matter technically ignorant you are, you can still follow this line of interview.)

The kind of response he's looking for is a calm request for more information: "Can you tell me why you want to do that?" Additional information may enable the tech person to suggest alternatives that won't damage the network in some way.

The unreasonable client then demands it be done anyway. In that situation, the candidate is expected to restate the objection calmly and then go off and do it — presuming it doesn't cause an immediate meltdown.

No, it doesn't end there. Next, the unreasonable client comes back, after the damage is done, and accuses the candidate of screwing it up. At that point, Mr. Luden expects the candidate to gently remind the client that they had considered other solutions at the time, but that this was the solution chosen. In other words, it's an "I told you so," without the angry client's nose being rubbed in his mistake.

Mr. Costas has another version of it. In his scenario question, he poses as a venture capitalist who's at home on a Saturday afternoon and needs to get at a file in the office. If he doesn't get that file, he's going to lose a billion-dollar deal, be fired and make sure the tech person is fired too.

Frequently, candidates will get focused on the technical aspects and ignore the business aspects. If the candidate starts walking Mr. Costas through the steps he needs to take to get at his file ("Pull up the Start menu, then find…"), he'll let that continue for a few minutes, then act as if he doesn't understand and can't follow the directions.

The kind of response he's looking for is something along the lines of, "Let me run over to the office, get that file for you and deliver it to your house on a floppy disk."

–> TIP #8: If you're anticipating moving your company, your service provider can handle the IT and phone part of that. And give plenty of notice.

Here's how Info Partners handles moves for their clients.

Believe it or not, they like to start six months in advance. Why so much time? Because that's how long the internal arguing may take. But Mr. Luden admitted that they've been brought in as little as two months in advance and still made the whole project work.

Mr. Luden said somebody on his team will come in and ask a series of questions:

  • Are you going to change anything in your business?
  • Does this move mean you are adding people?
  • Are you adding capabilities?
  • Are there going to be new things that are important to you?

At the same time, they bring up the topic of upgrades that may have been put off for awhile because the client hasn't wanted to take the network down long enough to implement it. So maybe some of those projects can be done at the same time as the move.

That all takes "some planning and thinking and negotiating and some back and forth," he said.

The plan is written up with Info Partners' recommendations. Then you can expect additional questions and negotiations. Once you've bought off on the recommendations, the "two month" clock starts ticking. (Any less than that and you can expect to pay more for the service provider's services and to have less-than-optimal performance that first week you're in your new place.)

Info Partners will need to order all the equipment. Think you'll just be working with what you have — just box it up and go? Think again. What about your phone lines and Internet connectivity?

"We'll hit the big one, which is circuits," explained Mr. Costas. Ordering "circuits will take you four weeks. It just will. Porting phone numbers will take you four weeks. It just will."

DSL, T1 and T3 lines are the longest lead items. Those can suck up the entire six weeks remaining before the actual move.

Next come the new servers — if you're getting them. Likewise, you may be upgrading your phone system, which requires new equipment.

Then physical work begins, which takes one to two weeks. That includes getting new phone lines installed and, most likely, new network cabling.

Once the circuits are in, those will require testing. According to Mr. Costas, "There's a pretty high volume of circuit failure on installation. You would be really surprised on how many times a T1 vender will come on out to install the line and either say, ÔHere you go — Merry Christmas!' — and you test it and it fails, or they identify a problem while they're onsite and say, ÔWe'll be back next week because we found a problem.' Once the lines get installed, then you can actually start doing the work."

Of course, it's not all equipment and services. There's also the human factor. As Mr. Luden explained, "You know how CEOs or directors of engineering are. They design their office so the desk is going to be on the left-hand side of the office when you walk in. And that is where all the ports are and that is where the cabling appears. One day without telling anybody but their executive assistant, they walk in and say, ÔYou know what? I want my desk on the right-hand side so it is near the window.' I can guarantee you, if you don't find that out and you wind up having to run cables across the director of engineering's office in order to reach from the wall where the wiring is to where his desk is now, he's going to think it is your fault."

So, as part of the plan, the service provider checks and rechecks to make sure everybody is aware of modified plans as the changes happen and to give others the time to react to the change.

The weekend of the move — yes, it usually happens on a weekend — Info Partners brings a team of five or six people together for final deployment. About 3 p.m. on Friday everybody is told to log off of their PCs. That weekend, the team moves the equipment, sets it up in the new location and takes care of any IT-related upgrades. Come Monday morning, they stick around for a few hours to address the little issues: "How do I make my Outlook look like it used to?" They also haul along a bag of power strips, because inevitably somebody won't be able to plug something in for lack of outlets. "We don't consider a move completed until all those issues have been resolved and operating is normal," said Mr. Costas.

Typically, by 10:30 or 11 a.m., Mr. Luden said, they're out of there and the client is operating as if nothing ever happened.

–> TIP #9: Even if you grow like gangbusters, you may never need to hire an internal IT person or put together an IT staff. Here's why…

As Mr. Luden pointed out, "General Motors still outsources." Outsourcing can provide an antidote to the problems you face when you have a sole-IT-guy/gal. As he spells it out, say you're spending $200,000 a year on the outsourced IT. So you realize that you could probably hire a top-notch person for $85,000, which means you're going to save $115,000 a year plus have somebody onsite full-time and available nights and weekends when the need arises.

The fact is that you're going to have to pay an additional 20% to 25% in benefits. Plus, you'll have no coverage when that person goes on vacation, goes out for training or takes a sick day. Also, nobody knows it all. Problems will undoubtedly surface that require outside help, which adds to the price tag. Plus, you face having to hire a replacement when that person moves on. (And they will move on. Sole IT people in a company where IT isn't the focus don't get many strokes — since their value to the company isn't what the company itself values.)

Also, when projects come up that require a staff of people — such as planning a move or a major upgrade — chances are, the sole IT person won't have the kinds of skills you'll need to manage the external vendor.

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Info Partners