What is Midsourcing?

Midsourcing is the process of emulating the presence of an in house IT department by means of remotely available IT talent through a 3rd party. The ultimate goal of midsourcing is to save a business from over spending in labor costs while guaranteeing levels of service similar to IT departments within an enterprise organization.

Is my current technology service provider a VAR or a midsourcing solution?

Identifying a true midsourcing company is difficult because it is often confused with being a VAR or an integrator of technology. A key difference is that VAR’s and integrators represent technologies from vendors while midsourcing represents your business to the technology community. Like an IT department would maintain your systems and communicate with the technology community, midsourcing services maintain what you currently have and help you communicate to VAR’s that represent specific products your business is interested in. By using a midsourcing company, businesses receive better service in between major technology role outs. VAR’s and integrators can be better utilized for costly project work and have significantly more information resource available when used in conjunction with a midsourcing service.

How does midsourcing impact my business?

Here are 5 keys to understanding how midsourcing impacts a business.

  1. Technology costs are more openly visible. You don’t feel the gotcha of unplanned service costs, neglected technology infrastructure and true ownership costs of new technology investments.
  2. Technology discussions will not seem like a foreign language. Technology discussed as a support component of your strategy is more understandable than a discussion about technology.
  3. The service is not subjectively valued. Technology service is often valued in terms of knowledge capital and the time the knowledge capital spends thinking about your business. Midsourcing enables a business to objectively identify the value of the service they are receiving through well defined metrics. Knowledge remains an important ingredient, however it is now measured against the metrics of how effective it is in relationship to your business.
  4. Technology understanding as it relates to your business strategy will create an open mind to new technology. With more visibility businesses can look at technology as an enabler and not a necessary evil.
  5. Recognition that technology unattended is key reason that business growth is stalling. Research shows that technology as a key component of a business strategy, especially small businesses, removes barriers to growing and often times expedites growth. Midsourcing will help a business recognize where true obstacles to growth can be found and addressed.

The end result of mid-sourcing your IT service should be a more strategic method to managing business impacting technology decisions while ensuring that the existing infrastructure supports the business. Midsourcing is not just a fixed rate service with guarantees, its design is to help small businesses feel as though they have a fully staffed IT department.

I’m not sure if my managed service contract is a midsourcing solution.

While most companies can offer remote assistance and claim to be the virtual IT department for their customers, midsourcing requires a comprehensive backend service process to effectively deliver the results of an in house IT team. Companies that have the benefit of internal IT teams have invested heavily in the creation of processes that limit the maverick IT styles that cripple businesses. This means change management processes and efficient service response processes that support end users must be defined in writing and followed. Likewise midsourcing companies must create similar governance practices to eliminate the threats their clients face when managing the volatility of technology. For instance, what strategies does the company use to minimize the risk of knowledge capital leaving the business? Many times when a consultant leaves a business, the information about customer infrastructures leaves as well. Midsourcing process management should eliminate threats to the client, including the loss of staff.


How can you determine if the company you are working with is a VAR or a midsourcing company?


Description of the company VAR
(Value Added Reseller)		 Midsourcing Service
Pricing
Can guarantee their rates X X
Uses results based metrics to determine rates X
Can fix bid project pricing X X
Pricing is not subject to time estimates X
Pricing is not subject to how fast something is accomplished X
Will lose money if too much time is spent X
Will make money if too much time is spent X
Price can be calculated without engineering time X
Price is budget-able X
Price is in-line with in house labor rates (per device/year) X
Service Delivery
Service expectations are defined by customer requirements X
On-Demand Premiums may apply X
Planned Service is preferred X X
Work is guaranteed to be performed as efficiently as possible X
Repair work is not hindered by accounting budget approval X
Maintenance work is performed without request X
Service impact can be measured X
Service can be audited for meeting certain expectations X
Service is valued in time spent X
Service is valued in employee/strategy enablement and system performance X
Service is primarily performed remotely X
Service is documented X X
Service work is shared by multiple non-billable resources X
Project Work
Projects are defined by the customers business needs X X
Projects are defined by the customers business needs X X
Projects are delivered as a component of strategy enablement X X
Project outcomes are stated clearly to prevent scope creep X X
Project outcomes are defined by agreed upon business outcomes X X
May be price concessions for planning project over 90 days X
Product Line
Services are not vendor specific X
Product value is determined by business enablement NOT knowledge capital X
Products can stand by themselves and do not require 3rd party products X
Products are primarily project driven X
Products include guaranteed levels of service X
Products are not one-stop-shop X
Products encourage diverse IT best-in-class support X
Experience
You feel like there is too much time being spent on your network X
You hesitate to invest in new technology because of hidden costs X
You don’t know how much it will cost to fix problems X
You feel like new technology is constantly being introduced to you X
You can’t say whether your current network can handle growth X
You have an open communication to establish future directions X X
When they show up you don’t feel like every minute is costing you X
You feel like you can invite them into discussions without a hidden agenda X
You feel like you don’t need them anymore because your network is working X
You see reports of work you didn’t even know needed to be performed X
Your staff open dialogue with them freely X
You feel like spending more in technology to support your strategy X
You know what the hidden technology threats are to your business X
You feel like they are an extension of your business X
You feel like their goals are in-line with yours X

The best way to identify a midsourcing company is to determine how transparent the processes are behind the service and how they utilize staff. Typically midsourcing organizations have very defined roles and communicate with formally defined means. They are willing to provide in-depth insight on specific service requests or all service being performed on your business. This means that if email, voice, text message and post it notes are key to any process, they have eliminated themselves as a mid-sourcing company. IT departments do not charge hourly rates and as such any service organization that has a fixed hourly rate should be considered a VAR and not a mid sourcing solution for your business.

Another difference between a Mid-Sourcing service and a VAR can best be explained by who the company represents. If they have many vendor products that they are “authorized” to sell you and use those products to define their organization, they are a VAR. If they present well defined service solutions that are not vendor dependent, but can better represent your business to the technology community, they are truly building a business capable of mid source consideration. IT department’s articulate internal business needs to external technology resources and likewise midsourcing must do the same.

What’s different about how midsourcing companies work?

True mid-sourcing companies pride themselves on how fast they work and how smart they are at using the right resources to get you what you want. If the organization you are looking at does not have a well defined method of delivering consistently on expectations they probably have limited visibility on the processes they have created and have very low fault tolerance capability. Essentially they must hand hold everything to ensure they don’t drop key technology balls businesses have entrusted them with.

What makes AccountablIT a Midsourcing solution

AccountablIT developed the Lumenavision Engine to emulate enterprise in house IT labor for small to medium businesses. The engine helps executives define expectations they have of technology by eliminating costly break/fix service calls using a repeatable framework that prioritizes technology needs by removing knowledge capital variability. Lumenavision surfaces information regarding system performance, service response and utilization enabling executives to effectively mobilize business resources to support their strategy.

AccountablIT is a pioneer of mid-sourcing because we have developed processes that are staples to ensuring that small businesses start to think more strategically about technology. As a customer of AccountablIT you are not solely dependent on our ability to support your business. Using a best in class mentality, we represent your business to the technology community by identifying the right partners to support very specific components of your business. As other technology service providers begin to build IT service strategies to enter the midsourcing market, they will look at AccountablIT’s efficiency model because it represents a true IT sound service strategy that emulates inhouse IT resources.

Read more about LumenaVision here.