SMEs look to outsourcing for IT efficiencies

Smaller companies stand to benefit from outsourcing IT services and could drive cost savings of up to 70 per cent through more efficient use of IT assets and business applications, a service provider argues.

Most small businesses fail to make the most of their investment in IT systems and software, yet are wary about turning to third parties for support. Moreover, SMEs believe IT outsourcing is the preserve of the large enterprise.

This is the view of itlab, a service provider that targets firms with 10 to 100 staff. The company, which already provides outsourced support for desktop systems and servers, is extending its capabilities in software development, with a particular emphasis on web services.

According to Dominic Monkhouse, managing director of itlab, the company already manages more than 5,000 client desktop systems from its bases in London and Birmingham.

However, Monkhouse believes that smaller companies could gain far more by looking again at their business applications, and in particular, whether data is being shared properly between company departments.

Pulling data together into one system, whether via web services code or by using a hosted back-office application improves ease of use and drives efficiencies, Monkhouse claims. Customers have increased sales by 40 per cent and cut operating costs by up to 70 per cent, he said.

The company is selling the smaller business software as a service application NetSuite, which it also uses internally.

"It has made a phenomenal impact on everybody here; we can now see all the information we have on customers," he said. But the company is also offering database authoring and integration, and especially, integration with businesses' legacy applications.

However, smaller companies are often reluctant to invest in IT now, even if it leads to longer-term cost savings.

One way itlab hopes to change this is with an innovative model, where clients can "bank" unused support time and use it for other tasks, such as development.

"Clients have to take a minimum of one day a month for support," said Monkhouse. "But if they don't need support, they can use that day for development and a growing number of clients are doing that."