CXO

Full-service providers: A solution for the small business?

Full-service providers claim to be the outsourcing solution for small and emerging businesses. They offer application and Web hosting, plus lots of add-ons. But are they right for you?


If you work for a small or emerging business, “flying by the seat of your pants” might be your modus operandi.

It’s clear that such fledgling companies are increasingly in need of assistance from outside firms for their future operations. GartnerGroup reports that “by 2001, the most successful external service providers will form quasi-permanent or situational alliances with partners to provide best-of-breed solutions.”

Full-service providers may be just the solution for growing companies. Like application service providers, they offer application and web hosting, with added services such as complete outsourcing of IT resources, including customization, systems integration, consulting, management, and development.

Should your company form a relationship with a full-service provider? Read on to find out.

What do FSPs deliver?
Industry insiders say full-service providers will be a good fit for small to midsize companies, especially those looking for integrated solutions. FSPs will allow them to outsource parts of their legacy systems, thereby removing some of the complications of integration. Firms like Breakaway Solutions, ReSourcePhoenix, and Push Computing —all FSPs—will allow small businesses and start-ups to dedicate cash-on-hand to their core competencies.

“We believe a lot of these smaller and emerging companies do not have the wherewithal or the cash flow to afford the capital-restrictive systems that they need,” said Eric Greenspan, CEO of Push Computing. “We can level the playing field by spreading the cost over monthly per-user payments.”

The providers, therefore, have to be ready to fulfill a lot of diverse needs.

“If you’re asking someone to outsource their IT, you’re taking over the responsibilities that the IT department once had,” Greenspan said. “Typically, an IT department does everything from putting out fires at the desktop to installing new and complex systems and upgrades, to training and implementing and working with other consultants to further the cause.”

A look at the vendors
Firms doing business in the full-service provider space specialize in various applications and services. Push Computing, for instance, offers business-to-business application hosting, integration services, and application and e-business development services.

“We’re a tier-two provider with the non-metropolitan territory as our subscriber base. These companies are looking for a one-stop shop,” Greenspan said. “We can manage because we have a smaller ratio of subscribers per contract. We can offer them more services.”

Those services include software applications similar to cable television. Primary Push subscribers receive a secure, managed connection to network with e-mail and Internet access, backups, upgrades, and system management. With Preferred Push, subscribers can choose from a list of a la carte applications such as Great Plains, SalesLogix, and Solomon. Subscribers can also upgrade to Premium Push, which includes custom development of an integrated e-business solution, including Web design, e-commerce, and integration of all applications into Push’s Web application portal.

ReSourcePhoenix, on the other hand, specializes in financial outsourcing services and e-business information management. Its signature offering, RPC Financial Outsourcing, features applications from Oracle, Broadvision, Necho, and Vitria. The firm’s accounting staff processes business information and delivers it to customers over the Internet. Other services include MARS Sales Force Automation, which integrates sales tracking, contact management, and inventory tracking; and S.T.A.R. Outsourced Investor Services (Syndication Tracking and Reporting System), which enables new and existing direct investment programs to streamline tasks and reduce expenses.

Breakaway Solutions’ primary focus is on e-business solutions for growing enterprises, with offerings including integrated strategy consulting, systems integration services, and application hosting.

The firm markets itself as a holistic solution for the developing business.

"Growing enterprises require one point of accountability to deliver strategy, creative, branding, implementation, and application hosting services,” said Gordon Brooks, president and CEO of Breakaway Solutions. “They don’t want to work with multiple pure-play specialists who can serve only one aspect of their needs while adding more points of failure."

As part of Breakaway’s Strategy Solutions menu, customers can even rent a CIO or CTO. Breakaway’s team of experienced technology executives can be contracted to work on a specific problem or to develop an entire IT strategy.

Getting the most for your money
Though their offerings differ, most full-service providers target the small to midsize market and specialize in integration of applications. Vendors say nearly any IT need can be fulfilled by full-service providers currently doing business.

“We have divisions in our company that do software development, billing systems, and e-commerce solutions,” Push Computing’s Greenspan said. “Because of ASP, we bring that to one network. Having all those components and having multiple customers from economies of scale allows you to build integration of different applications. We can become very good at integrating a particular CRM with an ERP and providing e-business connectivity. We’re completely customer-driven.”

While full-service providers can alleviate typical problems like unforeseen capital costs, constant upgrades, and employee turnover and training, customers should take advantage of services such as customization and integration in order to get their money’s worth.

“When we bring on a new client, one of the advantages we have is that all of our people are already trained in terms of how to use the application,” said Bryant Tong, president and COO of ReSourcePhoenix. “So that’s already a given. The software and hardware is already in place and it’s already integrated. What we have to do for every new client is the integration of their existing legacy systems or feeder systems into the applications.”
Is your company under contract with a full-service provider? Tell us about it by posting a comment below. If you have a story idea you’d like to share, please drop us a note.

Editor's Picks

Free Newsletters, In your Inbox