Good Match: Choosing an IT Services Vendor
IT services providers are like car mechanics. A good one can keep your company’s computer network running like a well-oiled machine. A bad one can mid-diagnose a problem, put in a bad part, and leave you limping along even worse than when you started.
You wouldn’t take your car to any old mechanic, so neither should you entrust the information backbone of your small business to any old outside IT vendor.
Picking an IT services company that suits your needs and your budget requires careful planning, rounding up a qualified candidate pool, performing rigorous due diligence, and once you’ve found a good match, continually monitoring the relationship, according to IT industry consultants and other experts.
A good time to shop for an IT services company is before you have issues that need to be addressed, so you’re not working in panic mode to find a quick fix to a serious problem, the experts say. They recommend having the following on hand before a search:
A network map -- This document describes everything there is to know about your company’s computer hardware, software, networks, and bandwidth provider. If you’re negotiating with an outside party that will be assuming responsibility for running the network, this type of document should also include information such as which employees can access to which files and how remote users connect, according to Michael Kraner, CEO at Primary Support, a 10-year-old New York City IT services firm that works with small and mid-sized businesses. A network map also comes in handy when you’re transitioning from one provider to another, Kraner says.
A statement of work -- A statement of work outlines exactly what functions or processes an outside IT services company will be responsible for. When it comes to this document, there’s no such thing as too much detail. If an outside firm is being hired to work on a project, for example, a statement of work would describe what’s to be done, how the outside vendor will work with various company personnel, and how the contractor will be paid, says Rocky Vienna, a long-time in-house IT manager and currently president of Vienna Technology Group in Palo Alto, Calif.
Where to find IT services candidates
Once you know what you need, start looking for prospective candidates. IT consultants and managers suggest consulting the following:
Friends, former colleagues or fellow professional association members -- If they run businesses that are the same size as yours or are in the same industry, these contacts are in a good position to commend vendors they know or use.
Board of directors -- Consult your board for the same reasons you’d consult friends or former colleagues, they may already know a firm that’d be a good fit.
IT industry executive recruiters -- Recruiters maintain enormous contact networks in order to fill in-house IT management jobs. Chances are some of those contacts are IT vendors that’d be interested in contract work, according to Vienna, whose firm does contract IT work for companies of all sizes. If you use a recruiter, however, be prepared to pay a premium for the service, he says.
The Internet -- Don’t underestimate the power of a good old-fashioned Google keyword search to find prospective candidates, Vienna says. He also recommends scanning IT blogs for mentions of IT professionals who could be candidates.
Check references and then some
Once you’ve narrowed the field of potential candidates down to a couple, check references. Contact the references the IT vendors give you, but dig around a little to find other customers too. “References are going to be the vendor’s customers who are the happiest, so you’re only getting one side of the story,” Vienna says.
In interviews, go beyond the standard questions and ask about things that can’t be answered with a simple yes or no, Vienna says. Some examples:
- If there was a contract negotiation, how did it go?
- What were some issues that you weren’t pleased with, and how did you resolve them?
- What areas of the contract did you have trouble managing?
Andre Preoteasa, a former IT consultant and currently IT director at Castle Brands, Inc., a New York City importer of fine liqueurs, also suggests giving a potential outsourcer a hypothetical IT situation that pertains to your business. If they can't give you a good explanation of how they'd solve the problem, and sound excited about the prospect of working on it, they wouldn't know or care enough to do it justice, Preoteasa says.
When negotiating a contract, make sure to include service level agreements that spell out the specific level of service you expect the contractor to provide, such as how often system backups will be performed and what the acceptable rate of maintenance downtime will be.
As for paying for IT services, you can either keep an outside firm on a monthly retainer, or pay as you go, according to Preoteasa, the Castle Brands IT manager. It’s tempting, especially for cash-strapped small businesses or start ups, to forego keeping an IT services firm on retainer because of the expense. But not having steady support could end up costing more in the long run, he says. By paying for monthly services you may fork over more initially, “but you can sleep at night knowing all your IT issues will be resolved,” Preoteasa says. Wait until something breaks and you run the risk of paying an outside firm $150 to $200 an hour to fix something without knowing how long it could take to get the job done.
Never pick an outside vendor just because they’re the cheapest, Preoteasa says. “My previous company made a lot of money fixing problems previous IT consultants caused” because the clients didn’t spend what they should have in the first place, he says.