Thinking Differently About Managed IT Services for SMBs
There’s nothing small about the SMB market, but there’s nothing easy about being an SMB either. According to the Small Business Association, there are some 6 million SMBs with employee-based operations – up to 500 people – along with another 24 million sole proprietorships. This sector is a major driver of employment and economic activity, but competing against bigger players in a globalized market is a major challenge.
SMB challenges for managing technology
Technology is one of those challenges, not just around understanding the latest capabilities, but also for adopting it effectively inside the business. New research from CompTIA on SMBs confirms just how important technology is to success, and how this is a strategic issue that goes beyond tactical moves such as updating a phone system. Almost two-thirds of the research sample – 64% – said that technology is a primary factor for reaching their business objectives.
Building on this, when asked about their top business priorities in the year ahead, the leading response – 41% of the sample – was: Implementing new systems or work processes to enhance efficiencies. While this priority isn’t exclusively dependent on technology, it no doubt plays a key role, and reflects the importance of technology for business success.
This relationship may be self-evident, but SMBs in particular, struggle on both fronts. When asked for a self-assessment of technology proficiency, only 18% felt they “excelled” in terms “vision and strategy.” In absolute terms, this is not encouraging given how strategic technology is to business success. Things are even less encouraging on a comparative basis, given that this level was 23% in the 2016 iteration of CompTIA’s survey. In other words, SMBs are having a hard time keeping up with technology, and that has implications for the health of the business.
Across all sectors, SMBs are in a hyper-competitive environment, and must be agile to compete against bigger players. This is hard to do under the best of conditions, and is even more so when you can’t keep up with technology. Not surprisingly, then, research from the Bureau of Labor Statistics shows that 20% fail within first year, and 49% do so within five years. To better understand how technology can contribute to these scenarios, here are three challenges that IT needs to address more effectively, especially when thinking about adopting collaboration solutions.
- Managing complexity
A key challenge for keeping up with technology is complexity, especially in a legacy-based environment. Most SMBs still have a lot of premises-based infrastructure, and while there’s a desire to move towards the cloud, they face inherent constraints. On one hand, there’s a comfort level staying with familiar technology, but capital funds are scarce to continue this way. Conversely, the cloud is the best way for SMBs to modernize their communications capabilities to make employees more productive, and to make the organization more agile.
The cloud also helps IT alleviate the complexity that comes with managing a messy mix of standalone legacy applications. Not only are new applications coming all the time, but to deliver on the above outcomes, these applications need to be integrated. For most SMBs, their IT teams don’t have the required expertise to do this – not just once, but on an ongoing basis. Furthermore, the associated technologies are largely unfamiliar, and IT will often lack the skill set and resources needed for cloud-based platforms.
- Supporting a distributed organization
In today’s market, when businesses grow, they become more distributed for a variety of reasons. This is especially applicable for SMBs, as they tend to grow quickly, and are often operating from one or just a few locations. As such, the process of scaling will present new challenges that IT is not well-equipped to address. Aside from having a greater number of physical locations to support, they will usually be spread across more regions or distant geographies.
The distributed model is well-suited for these needs, which are being driven by two trends in particular. One is the need to support a global customer base, and as that base grows, so must the footprint of the organization. Secondly, there is a growing preference among younger employees to work remotely, and this also holds appeal for SMBs in terms of reducing the need for office space.
While it should be clear how this model drives agility, it should also be clear that cloud is a critical enabler. IT simply cannot support all of this with premises-based technology; not just for the applications, but also for the network infrastructure to ensure that all employees have a consistent user experience.
- Securing your data and network operations
According to the National Cybersecurity Alliance – via this article in Inc. magazine, 70% of cyberattacks target SMBs, so these threats are not just a problem for enterprises. Both the incidence and scale of cyber attacks keeps growing, and the varieties are endless. Most businesses lack the proper security posture, and as IT moves further in the cloud, the risk factor rises as network touchpoints become more virtual and harder to protect.
SMBs have limited resources to fully understand what’s needed in this environment, and partners for cloud services must be chosen carefully. On a basic level, these partners need to understand your network infrastructure around which they can provide the right level of security. More specifically, they need to be well-versed in the complex landscape of compliance requirements around data security. This applies both horizontally for industry-based needs, as well as vertically for regulated markets such as healthcare and finance.
Cloud-based IT – what SMBs should be looking for
With technology changing so quickly, IT faces challenges on many fronts. As noted earlier in CompTIA’s research, SMBs depend on technology to achieve business objectives, and legacy infrastructure is putting them at a disadvantage. Not only is the cloud the best way to catch up to today’s needs, but it makes the complexity of these technologies easier for IT to manage. Technology aside, it’s also important to note the appeal of cloud economics. Being Opex-based, the subscription pricing model is cashflow-friendly, and provides cost certainty for budget planning. The focus here may be on supporting IT with new technology, but the same challenges apply to collaboration.
While the rationale for cloud may be strong, most SMBs lack the expertise to fully manage this transition in-house. In other words, applications and platforms aren’t the only use cases for the cloud; many aspects of the IT function can be managed this way as well. Increasingly, the XaaS model is being applied to the IT sphere, and for SMBs looking to seriously leverage the cloud to become more agile, they need to re-think what outsourcing can deliver here.
Managed IT services has been offered for a long time, but options for SMBs have been limited. Given the scale and complexity needed to support large enterprises, a large ecosystem of managed IT providers has become well-established. For SMBs, however, these services are cost-prohibitive, leaving a gap in the marketplace. Most of the managed IT offerings catering to SMBs are from smaller, often regional providers. This translates into a fragmented space with an inconsistent and often incomplete mix of offerings that don’t meet the enterprise-grade aspirations desired by SMBs.
Today’s cloud-based technologies can deliver more, and given the size of the SMB market, IT can expect more from managed services providers. Considering the three key challenges outlined above, I’ll conclude with some guidance on what SMBs should look for in a managed IT services partner.
The cloud can remove a lot of complexity from technology, with the end result being applications and services that are easy to use. This form of outsourcing is built on a consumable model, where offerings are used on-demand, and can easily scale up or down as needed. While this model is fast becoming the norm for workplace applications such as UCaaS or hosted UC, it applies equally well to IT services.
One example would be remote help desk to support IT with everyday operations and network monitoring, or desktop support for end users when provisioning updates or new applications. The main point here is that managed IT services can alleviate the complexity around the cloud, freeing up IT to add value in more strategic areas so the business can leverage the cloud more effectively.
Once you define the pain points around complexity, you should look for IT services partners who can address them all in a seamless fashion. Many only have boutique capabilities, and you should instead be looking for a partner with a full range of IT services that are tightly integrated.
- Distributed organization
SMBs are just as pressed as enterprises to operate this way, and to scale effectively, your managed IT partner must match your footprint. Most providers serving SMBs have a small or regional footprint, and these would not be a good choice if your operations base is broader. Business continuity and disaster recovery should be primary considerations, and it’s not enough to know how many data centers or NOCs the provider has. You also need to know where they are located, and to provide effective redundancy, they should be spread across multiple regions or even geographies.
Another important factor relates to the above issue of complexity. The greater the number of locations, and the wider the geography, the greater the IT challenges. These requirements are becoming too complex for premises-based technology, not just for end users, but also for IT to support them. With a decentralized operating model becoming central to the success of the business, your managed IT partner must have the scope of coverage to match your operations. Complexity will only increase with decentralization, and you need to assess how a managed IT partner will manage that so the business can keep growing smoothly.
As SMBs move further along the cloud path, security becomes more important. Aside from managing your data remotely in a cloud, security also becomes more challenging in a distributed environment. The needs here go beyond securing business data and protecting personal privacy, making this a strategic issue. Data breaches and cyberattacks are a major concern, and most SMBs lack the resources to stay current with ever-changing regulations and compliance requirements. Furthermore, security also impacts network uptime, so the earlier references to business continuity and disaster recovery apply here as well.
With this in mind, choices for a managed IT partner should be based on having the right certifications. These are the best markers for security compliance, and for the highest degree of surety, your partner should be SSAE 16 SOC II certified. For SMBs looking for the best assurances around data privacy, and especially those operating abroad, your partner should also be GDPR compliant.
As the cloud environment continues evolving, new standards will emerge, so it will also be important to understand their broader compliance roadmap. Since most SMBs are not well-versed in security, you should consider what resources a managed IT partner can offer to help identify and manage threats. Offerings such as diagnostic tools or applications can provide a great deal of value in terms of taking a proactive rather than reactive approach to security.