The Growth in Mid-Market Outsourcing

anthonykkingManaged Services

The Mid-Market has always been the ‘Holy Grail’ for IT services and traditionally hard to penetrate. There are over 70 million small and 800,000 mid-market businesses worldwide. As a whole they constitute over 97% of the business segment. Their collective IT spend is projected to grow by 6.5% between 2013 and 2016 which is a lot faster than the Enterprise segment.

Initially many people thought that Cloud would replace traditional outsourcing. The reality is that Outsourcing has absorbed Cloud and, with these new technologies, is being applied more effectively and profitably to mid-market businesses. The statistics across 2012-2013 supports this by showing far more activity in lower value than higher value outsourcing transactions.

Traditional mid-market Managed Services Providers (MSP’s) are going to either be forced to adopt the scale and disciplines of an outsourcer, or watch as their clients move to one that does!

Every business should at least consider Outsourcing as a solution, and unless they have in-house expertise it is very much in their interest to bring in some guidance to help them evaluate the rationale, assess options and assist with the changes. The alternative is to rely on your service partner who has a vested interest and who may also need some guidance!

If you Google search you will find various lists of advantages and disadvantages for outsourcing but each business is unique and will need to use these as reference and not a comprehensive, or necessarily correct, list. Our example list is included below but please contact us to discuss and we don’t charge for this!

Advantages

  • You can defer administration etc. to a specialized company leaving you to focus on core business challenges
  • You benefit from the expertise of your services partner
  • It typically reduces the operational costs of delivering services
  • It can provide greater levels of agility allowing the business to grow and expand into other areas 

Disadvantages

  • Your service provider will work to an agreed contract and it can take time and additional costs to make any changes if your strategy or plans change
  • Unless you invest a lot of time and expertise in defining the expectations it can be difficult to align and manage the priorities of your provider (profit!) and your business (service and cost)
  • The additional complexity associated with running a service on a contracted basis with a provider can impact the quality and speed of communications and result in miss-understandings and frustrations
  • You need to handover control, and sensitive business information, which can put you at risk if things do not work out, or the provider goes bust!
  • You make find there are issues where data is stored, especially if you agreed to offshore services as different countries have different legislation in respect of data security.