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Choosing Information Technology Vendors and IT Service Providers

Updated on December 23, 2008

In today's current economic situation, companies are looking to right size all expenditures in an effort to lower overall operating costs.  One significant category of spending for most businesses is costs related to Information Technology (IT).

Evaluating Information Technology costs can be difficult due to the complexity of the subject matter.  More importantly, heavy Information Technology vendor marketing campaigns often provide information that pushes a vendor's products and revenue generation agendas versus providing the information needed to right size Information Technology spend. Small- and medium-sized businesses in particular, who do not have IT service departments, find it difficult to "push back" on Information Technology spend with their vendors.  Now more than ever, it is imperative for management to get the right information to make well-informed decisions.  

Even managers without significant Information Technology experience are still, for the most part, relatively comfortable with the costs related to the acquisition of Information Technology. With numerous vendors cutting prices to move merchandise, and a wealth of information available on the Internet that allows for comparative shopping, purchasing Information Technology is relatively easy. The ongoing cost of ownership, however, is becoming much more difficult.

There are several key questions that a small- or medium- sized business manager needs to consider before making any Information Technology decision. What services are necessary to keep the acquisition up to date and functional?  If the device or software component were to disappear tomorrow, what is the revenue or cost impact on the business?  Who has ownership of service and support for the technology and how comfortable are you with the service level?  How many vendors are needed?  Is support better handled in house or via a third party provider?  


According to Blake York, of Dallas-based networking consultation firm eLink Systems, "There has been a lot of confusion created for business consumers.  Some of this is a result of traditional product vendors getting into the services business to make up for revenue shortfalls."

With a variety of sources for information, and numerous companies offering a wide array of IT services, choosing the right IT service offering from the right service provider can present a daunting task. To avoid the frustration of sorting through copious amounts of confusing technical jargon, many in management resort to the simplest solution, which is to rely on extended warranty and services offerings that are bundled at the time of purchase from major vendors such as Dell and HP. While this may simplify the purchasing process, in many cases, it complicates the implementation of the technology.  For one, it opens a small business up to having multiple service providers that are now subject to "stepping on each other's toes" as they implement and manage their services.  

"We see all too often situations in which two large vendors get into a finger pointing game while implementing a product or solving a problem," explains York.  "In the meantime, the business becomes impaired resulting in increased cost, lost productivity, and in some cases lost revenue."

The most recent trend in the Information Technology industry is the movement of traditional manufacturers into the service industries in response to the growing economic crisis. There is evidence of this trend in recent news headlines announcing mergers and acquisitions, such as the recent HP acquisitions of service firms like EDS, and in the launching of IT service offerings from manufacturers in the copier, office supplier, and electronics retailer industries. The reasoning behind these moves is simple. 

Business consumers are lengthening their technology acquisition curves to reduce capital expenditures. However these same consumers do not have much of a choice when it comes to keeping their existing technology running. This is a revenue opportunity that many manufacturers are keen to jump in on.  The problem for the small- and medium- sized business owners is that implementation of the heavily marketed Information Technology offerings is often easier said than done.  


In order to be profitable, large service organizations must scale their services back and keep costs down.  In an effort to reduce costs, most service companies typically provide remote support that is provided by commodity-level employees. This remote support uses either template-based approaches or automation through software and other technology.  For 80% of the problems that arise, this system is effective.  The other 20% of problems is what can bring down a small- or medium- sized business and drive up costs for the business owner.  Moreover, frustrations are often escalated as customers in need are forced down processed paths that include phone menu systems, a revolving door of support technicians, and in some cases overseas call centers. 

What Are the Alternatives?

Business owners faced with this situation should consider the following steps.  First, consolidate and eliminate unnecessary providers.

"We evaluated our Information Technology spend and found two different vendors that were providing a service we were already paying for with our preferred IT services vendor.  The elimination of these vendors went straight to the bottom line," commented John Julian, owner of The Massage Co. in Dallas, TX.

A second consideration is to select a service provider that matches your business profile.  If your business prides itself on highly qualified employees, low turnover, and great business networking in the local community, you'll want to select an IT service provider with the same values and profile. The results can range from simply getting higher quality service to strategic introductions and sharing of business leads.  

"We have a very pointed strategy of expecting partnership relationships with our vendors.  As a result, there is a healthy exchange of leads and idea sharing that benefits both parties," commented Maurice Gilbert, Managing Director of Conselium, an Executive Search Firm specializing in the corporate compliance industry.


Is It Dangerous to Put All Your Eggs in One Basket?

Given the wide array of Information Technology that is available, with numerous operating systems and different purposes, it is common that a small business will end up purchasing a number of technologies from several service providers.

A diversity of IT service providers inherently has certain technical issues, which affect productivity and efficiency. With a large diversity of technology running on different systems, it is a certainty that compatibility issues will arise from time to time. When a problem does occur, it is important that a small business quickly and effectively deal with the issue in order to prevent a significant interruption of the day-to-day business operations.

According to Blake York, "A diversification of IT service is not a good idea in that, when a system fails, the consumer has to contact every different service provider to locate the source of the problem. This can, and often does result in finger pointing between providers and considerable delays for the consumer."

There are a number of issues that can arise through the use of several providers at once. Many compatibility issues can arise if a network is not installed properly. Additionally, many manufacturer and vendor installations do not take the time to ensure that a network is properly set up, resulting in inefficiency. There is no one person or company that can fix a system such as this, as no one knows how the entire system was installed.  


With a wide variety of technology running on different systems, it is a certainty that compatibility issues will arise from time to time. When a problem does occur, it is important that a small business quickly and effectively deal with the issue in order to prevent a significant interruption of the day-to-day business operations.

According to Blake York, "At eLink Systems, we want our customers to turn to us for all of their Information Technology needs. This is good for the consumer as they will be supported by someone who knows their entire system and can quickly and easily address any problems that may arise, while also minimizing the number of on-site visits and the amount of time spent diagnosing an issue, which can cost the customer in both revenue lost and service expenses incurred."

To ensure efficiency, businesses should consider choosing an IT services provider that not only offers a wide variety of technologies, but also one with a preventative mindset. The majority of support services provided by a manufacturer are reactionary, or "break and fix" in nature, and are limited to the vendor's products. Businesses should instead consider a services vendor who offers installation and maintenance. With a focus on preventative measures instead of just reactionary, service vendors can eliminate many issues with compatibility and performance that would arise without proper installation. Many service providers partner with manufacturers and can provide insight as to how to apply the products to a business to either increase productivity or lower cost.   


Call Center vs. IT Service Vendor

The necessity for quick solutions gives rise to a major problem, namely that remote service and support systems do not allow for a quick solution to any problem. Instead, a small business owner is forced to place a call to the support staff, often located in a different state.  Sometimes, given the global market and offshore out-sourcing, the support call is even placed to another country. This will often result in confusion due to language barriers, as well as a lack of understanding of the problem due to the support person not being on-site.

The business model of vendor customer service inherently does not lend itself to on-site service. For major repairs, hardware must be sent to the manufacturer, resulting in a long wait for a consumer. This wait can sometimes be extremely harmful to overall business performance. While some technical difficulties can be resolved remotely, often problems are simply too great and require a technician on-site to resolve the issue. With a service minded vendor providing installation and support services, in-depth issues can be quickly resolved on-site by a technician already familiar with the system.   



While any major purchasing decision related to Information Technology can be intimidating, there are ways that a manager or small to medium business owner can minimize the risk to productivity while a transition is made. A consolidation of vendors can be beneficial to a company, but it requires that the consumer find a vendor who can provide all the technology that is needed, and can also provide effective and efficient technical support. With an experienced, preventative-minded vendor providing IT services as well as installation and support services, a company can rest assured that the risk of technical problems arising will be minimized and that, should the need arise for technical assistance, that help will be able to quickly and efficiently resolve any issues.


Primary Article Source

We would like to extend a special thanks to Blake York of Dallas based IT service vendor eLink Systems. eLink Systems serves as a Information Technology vendor and IT services provider for small businesses.



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    • lindsays5624 profile image


      8 years ago

      I certainly agree that youy should not put all your eggs in one basket otherwise the provider can just put their prices up. You need to keep enough skills in -house to at least re-source.

    • sukkran profile image

      Mohideen Basha 

      9 years ago from TRICHY, TAMIL NADU, INDIA.

      good informative hub.


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