10 reasons why small businesses should consider outsourcing

* Why SMBs should be interested in outsourcing

Mega outsourcing deals are traditionally out of reach for small and midsize businesses, but that hasn't stopped some SMBs from outsourcing certain tasks such as payroll, benefits and other HR activities. However, big technology and technical resources were historically harder for SMBs to outsource given the size of their business. Changes in the technology outsourcing market have given this sector many outsourcing options today. These changes include:

* The rise of specialized service providers including ISPs and local managed service providers for desktop management and other IT functions.

* Productized offerings from the large outsourcers including service desks, desktop management and specialized network offerings. Examples include EDS Agile, HP SMB Services and IBM Express Advantage.

* Offshore development and quality assurance options for very small projects. Many small firms and individuals have cropped up in Eastern Europe, India and Asia to provide specialists and attack projects of any size. These are supported by the many online sites that match outsourcing buyers and outsourcing providers, such as WorldLancer, OffShoreXperts.com and many others.

* The broad availability of Software as a Service (SaaS) offerings for many types of applications including CRM, desktop management, service desk, online surveys, voice mail, and many, many others.

Large vendors of all types have tried to crack the magic marketing and distribution code and find a way to cost effectively deliver products and services to the SMB market. This is difficult because SMB deals are small while much of the selling overhead is the same or higher as compared to larger companies. SaaS or on-demand software has become a very significant way of accomplishing this using the Internet as a ubiquitous means of distribution. Many start-ups and large vendors alike have used SaaS models to provide a mix of software, services and leveraged infrastructure to cost effectively deliver value to SMBs.

I recently spent time with one SaaS vendor, GotVMail, which is successfully delivering a complex service to the smallest of businesses. For a small monthly fee, GotVMail can provide high-end in-bound telephony and voice mail features for companies as small as one to 10 people. Features include a single toll-free or local number, main greeting auto attendant, multiple extensions, live call forwarding, music-on-hold, and voicemails and faxes via e-mail as MP3 and PDF attachments.

Such features could regularly cost a small company $15,000 or more if purchased through traditional channels as on-site equipment and software. With this SaaS offering, the user only needs to provide their own dial-tone, a cell phone, office phone, or home phone, with no other equipment or software required. This is just one example of the kinds of power services now available to SMBs.

Many successful entrepreneurs take quickly to outsourcing as a fast and low capital way to provide non-core processes. With few employees and no time to deal with non-core issues, entrepreneurs often have no other choice. Up and running small businesses may not be as quick to look outside for options. I think all SMBs should consider outsourcing as an option. I offer the following 10 good reasons for SMBs to consider outsourcing:

1. Access to specialists on a part-time basis.

2. Leverage someone else's infrastructure and reduce your capital requirements.

3. Low start-up costs.

4. Reduce labor costs.

5. Predictable costs for budgeting.

6. Fast start-up time.

7. Reduce risk.

8. Relatively easy to change direction compared to internal options.

9. Level the playing field with your big company competitors.

10. Focus on your core business.

Copyright © 2006 IDG Communications, Inc.

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