Mid-market
organisations face a conundrum when it comes to sourcing IT services. They
realise, and mostly accept, that their organisations are not a priority for
large system integrators.

However,
generally speaking they are more likely to find a better outsourcing experience
if they do manage to engage with a large integrator: so the challenge is to find smaller
IT service providers, with a mid-market focus, that can deliver best-in-class
service levels.

A recent
Quocirca research report, called the “Mid-market conundrum”, covered businesses
with between 500 and 5,000 employees across a range of business sectors and shows
the degree to which the UK mid-market relies on outsourcing.

Most
organisations are more likely to outsource a given application than they were
two years ago, especially utility services such as email, voice and
conferencing; it is also seen as the best way for many to achieve business
continuity goals.

Through
doing so, mid-market organisations largely expect to procure the same service
levels as their enterprise counterparts; this being true even for the smallest
of organisations. In other words, second best is no longer good enough, the
mid-market believes it should, and can, achieve access to best-in-class IT
applications by seeking the right IT service providers.

The drivers
behind this are made clear by the new research:

  • Over 70 percent of mid-market employees are
    hands-on IT users, this rises to almost 90 percent in financial services
  • The need for reliable external interaction is paramount;
    the average mid-market organisation now transacts with 40 times as many
    external users as it does internal ones, the ratio ranges from 30 in
    manufacturing to 50 in financial services

  • All this has to be achieved with limited
    internal resources. Smaller organisations have on average one IT headcount for
    every 45 employees, with the figure rising to one IT person per 112 employees at
    the upper end of the mid-market

Most say
that the resources they have available are not enough to support the demands placed
on them; and that too much time is spent fire-fighting, for example, dealing
with unexpected IT problems and compliance issues. Such distractions mean the
most neglected areas are discussing IT requirements with the business, and
planning innovation.

The area where
mid-market organisations are most likely to say the time spent is “about right”
is working with IT service providers. In other words, the ideal is to off-load more
of the mundane stuff to those with the skills to do it and in doing so, try to
free more time to build value through IT for the business.

To achieve
this, most say they must find the time and resources to focus on four key areas
of innovation within IT:

  • The use of public cloud services – which is a
    logical extension of outsourcing

  • The use of social media, especially to help
    drive all that external interaction
  • The big data opportunity, a big part of which is
    making good use of the detailed data generated through transacting online

  • Consumerisation, through the use of personal
    devices and web resources by both employees and external users

Those
mid-market organisations likely to achieve the most success will be those that
find the right partners to ensure they maximise the benefits in all areas of IT
deployment and deliver reliable applications for both external users and
employees. Few expect to find one IT service provider that will deliver all
their application needs; the average number of partners worked with in 2013 has
increased compared to two years ago.

Long term
success will be found with IT service providers that have the necessary focus
and experience. Mid-market buyers should look for proven ability to deliver guaranteed
service levels for a given application; be it utility or bespoke. They should seek
providers that focus on the partnership more than the contract and see the
relationship as a long term investment. Find this Holy Grail and you may
achieve something which only a select few report: a better than expected
experience.

Not many IT
service providers stand out in a frothy market. Most mid-market buyers complain
that it is hard to tell the difference between one provider and another during
the procurement process. Once engaged, those mid-market organisations who say
their providers focus on partnership are more likely to
report a better than expected experience, but only marginally so.

Still, it is
clear from the new research, which was sponsored by Attenda, where the mid-market
expects the focus on service providers to be. Primarily, it must be on ensuring
the efficient use of IT resources whilst keeping costs under control; after
this come delivering business outcomes and the ability to provide supplementary
on-demand resources.

Where the
partnership between a mid-market organisation and IT service provider is a
success, the net result is that both raise their game. The mid-market
organisation will have better, more reliable applications and therefore provide
better service levels to all its users; and through demonstrating success, the
IT service provider will find it easier to win new contracts and grow its
business: a win-win scenario for the select few that can find it.