Taking IT system off site may be useful
Atlanta Business Chronicle - by Paige Bowers Contributing Writer
Ask Nicolas Chronos and he'll tell you that a bit of computer downtime can be catastrophic for his 2.5-year-old, 60-person research foundation, Atlanta Cardiovascular Research Institute.
"We're not experts in IT at all," said Chronos, the institute's director. "And we realized that if we were to add an IT structure to our group, we'd have to think about adding four or five more salaries to our costs. That can be incredibly expensive and complex, especially if your computer system doesn't work."
Still, Chronos said, his institute needed some sort of information technology structure, since a bit of computer downtime equaled the loss of "loads of money in productivity." Not good, he said, when the National Institute of Health sponsors much of your research.
That's why small outfits are finding it pays to treat their IT functions as a utility, a la electricity, gas, water or even cable. So they're outsourcing these functions to third-party providers, some of which can constantly monitor and repair computer networks from a remote location, others of which are paid to repair a network on-site.
Outsourcing the worry
Instead of catastrophic downtime and hefty salaries for on-site IT guys who might not always be needed, these small businesses have discovered that outsourcing IT allows them to save money and increase productivity, because they can focus on their businesses and leave the technical stuff up to someone else.
"Besides, if your full-time IT guy is any good, chances are he's sitting around playing solitaire," said Ashish Mistry, co-founder and chief marketing officer of Virtex Networks, a 24-employee company that provides IT solutions to small and midsized companies.
Atlanta Cardiovascular Research Institute is one of Virtex's clients. After signing a two-year contract for services such as T1 lines, monitoring and maintenance, data backup and remote access, Atlanta Cardiovascular pays a monthly fee (ranging from $120 to $160 per person) and gets free high-end computer equipment and network service providers for what the company said is 10 percent to 25 percent less than it would cost them to build a similar in-house system.
The backbone? A system that includes a Cisco 2600 series router, a Dell Poweredge server, a Hewlett Packard Procurve Managed Switch, Computer Associates NetworkIT Pro Network Management software and a Microsoft Windows 2000 server.
The bottom line? In a setup such as this, computers are managing computers and humans are managing the relationships.
Cutting cost
By outsourcing, Chronos said, a small business can cut costs and have a positive IT experience.
"In all honesty, partnering with Virtex turned out to be fabulous for us," Chronos said. "Our costs are down, our productivity is up and we can focus on what we're good at without being expected to worry about our IT system.
"They offer us guaranteed up time because they can see whatever network problems we might have in advance and deal with it remotely," he added. "If they have to send in a tech person, that guy comes prepared with a new hard disk, if that's what we need."
A recent U.S. Office of Technology Policy report showed that competitive pressures have driven businesses to adopt a wide range of computer systems to improve productivity, manage production, improve both internal and external communications and to offer customers new services. The report stated private-sector investment in enterprise-wide applications alone was estimated to be $42 billion in 1996. It also reported the service sector, which now represents 70 percent of U.S. gross domestic product, is increasingly IT-intensive.
Reducing a constant investment
Not all small businesses can afford that kind of constant investment though, Mistry said.
"`If it's not broken, don't fix it' is the mentality a lot of small businesses have," he said.
Todd Zeldin of the 100-employee real estate consulting firm ACG Professionals said it doesn't make any sense for small companies to have to keep up with the ongoing changes in technology and software. That's why he outsourced his company's hosting and software to a third-party provider, he said.
Some small businesses that choose to outsource their IT still wait until something breaks to call a technician, said Jeff Aronoff of Solutions PC, a Tucker-based computer and printer repair store.
"We work with very small businesses, and I'm only called on an as-needed basis," he said.
Aronoff said Solutions PC charges customers $125 an hour. Even if Solutions PC can't provide a specific service such as wiring a major network or hosting services, Aronoff said the company can refer clients to someone else.
"We focus on what we like to call LBN, or `little bitty networks,'" he said.
However, he said, Solutions PC cannot guarantee when a technician can get out to a client to fix something.
"If a server is down, it's going to get a little bit more priority than if a network printer is down," he said. "Plus it depends on how busy any one of us are on a given day. If something's broken and there's a tech available, we fix it. But we have the kind of trust with our customers so that they know we'll be out there to take care of things for them as soon as we can."
But that downtime can get a little prickly for small businesses, Mistry said.
"Say you call someone up or page them to come out and fix your network," he said. "They've got to deal with traffic. And once they get to your offices, they've got to diagnose the problem, then go get a new hard drive, then drive back. Meanwhile, the employees have been doing nothing since the hard drive broke. And that's productivity lost. That's a lot of the things that small businesses don't realize. They're missing out if they're not saying `What does it really cost me when people aren't working?' So our main focus is making sure computers are up and running so people can do work."
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