You’ve probably noticed that being fleet of foot isn’t the only attribute required to compete with the big boys.  Increasingly, having depth of information systems resources defines a small business’ ability to stay toe-to-toe with businesses who have reached “critical mass” – businesses who can afford the best and the latest computing platforms, sophisticated management applications and leading-edge data mining tools.  How can a small business compete in this arena?

When it comes to speed to act and react, small businesses clearly have the edge.  This is why the largest companies in the world constantly strive to carve their bulky proportions into smaller, entrepreneurial units.  However, what these Fortune 500 “small businesses” have that the under-$10 million company doesn’t is a plethora of information technology resources.  What options are available to mitigate this extremely powerful advantage?

Regional distributor Climatic Corporation of Columbia, South Carolina chose to outsource their needs to a firm with the resources depth of a company 10 times its size.  The bottom line: Climatic enjoys the information systems power of a Fortune 500 company at a cost in line with their balance sheet.  A must, since they compete with nationally-based, highly verticalized powerhouses.  Climatic enjoys the same collection of data center, technical personnel, platform and software resources their largest competitor, Carrier Corporation, takes for granted.

IDC of Framingham, Massachusetts defined in a white paper the major advantages offered by having IT needs outsourced or “hosted” by a qualified service provider.  Here are the conclusions they drew in their article of November, 2008.

Depth of personnel resources – Managed hosting services providers offer substantially more depth of personnel and technical understanding than a small business could ever dream to assemble in-house.  A great deal of “cross-pollination” takes place within the engineering community.  Building such a community is a fiscal impossibility in the small business environment.

Lower total cost – A significant, measurable economy is enjoyed by sharing expensive server resources among many users.  Do your cost accounting homework and you will find that having your applications hosted is probably cheaper than trying to do it in house.  This cost advantage becomes magnified by moving from personal computers to thin clients.  Gartner Consulting suggests that the cost to purchase and manage a thin client over its life can be up to 71 percent less expensive than a PC.

Ability to attract talent – Since an economy of scale is achieved by placing many small firms’ needs in a single facility, providers can afford to attract, hire and keep scarce technical resources. The best and the brightest see getting pigeonholed in the IT closet of a small business as professional suicide. 

Improved performance – Multiple performance facets can be significantly improved by relying on a managed hosting services provider, including a measurable reduction in system downtime, dramatic enhancement of application launch and operational speeds and higher platform sophistication, which means a greater leveraging of application features and benefits.

Implementation of solutions – Because adding solution modules to existing application infrastructure can mean adding programming or system implementation and support talent, the average small company loses precious time assembling the components or decides it can’t afford to act, even if the benefit rationalizes the cash expenditure.  A good, qualified provider generally has the talent in place and can, therefore, act on the need quickly.

CFO Dennie Wetherley of Climatic Corporation agrees with this assessment and adds several more reasons for outsourcing his IT needs.  “Climatic could never scale and support our ever-growing IT needs with an internal solution,” says Wetherley.  “We get a large enterprise experience, including 24/7/365 user support and access to our critical applications and data anytime, anywhere.  This is a critical advantage in the hurricane-prone region we’re in.” 

While outsourcing IT needs to a managed hosting services provider is not for every business, data suggest it is rapidly gaining recognition and acceptance worldwide.  Consider how your business might better compete if it had the information systems tools of your toughest competitors.  What you’re sure to discover is that the 800 pound gorilla can be caught – and beaten.