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Few, if any, industries escaped the effects of the COVID-19 pandemic. Even in the technology sector, where change is a normal part of business, many professional services and technology consulting firms struggled to cope with the disruption.
That seems almost paradoxical given that organizations across just about every market sector had to embrace work-from-home operations or other business changes and implement the technology resources — including cloud services — to support them. But some of the declines in business for service providers were simply due to a ripple effect. Many companies in industries such as tourism, manufacturing, and hospitality cut costs during the pandemic to stay afloat.
Now, as most economic indicators begin to trend positive, companies are once again ramping up their IT projects. Long term solutions are necessary at the scale required for sustained operations and cost effectiveness. Innovation and creative problem solving are both critical to help ensure that IT investments made today can accommodate what’s now and what’s next.
Companies must choose the right type of IT services firm to implement the technology solutions they need to survive — and thrive — in a rapidly evolving business climate. Those needs must be met if companies are to adapt to a different way of doing business. In this article, we look at three options – IT consulting firms, IT outsourcing companies, and cloud systems integrators – We review the pros and cons of each, and make the case that cloud systems integrators may be the best option for the new IT paradigm.
Option 1: The IT Consulting Firm
Pandemic or not, hiring a big-name IT consulting firm often comes with an equally big price tag. Forgoing work with these higher-priced companies or simply cancelling projects reduces expenditures.
There’s also the reality that many of the larger consultancies really aren’t positioned to efficiently or cost effectively help organizations implement necessary IT strategies. Their areas of expertise lie in assurance services, taxation, management consulting, advisory, actuarial, corporate finance and legal services, to name a few.
Through mergers and acquisitions, they’re able to offer some IT implementation services. Where they shine on the technology front, however, is more in terms of big-picture IT strategy and enterprise-wide digital transformation and less on the actual execution.
They may have the staff to take on something like a cloud migration or cloud-native application development project. But technology implementation is not a strategic part of their business, so they aren’t necessarily eager to take on these types of projects — particularly if they aren’t of a scale that would allow them to make a sizable profit.
As is the case with other services delivered by the larger consulting groups, overhead and additional factors tend to drive costs up. It can be difficult for them to price their services competitively compared to smaller or niche technology companies. They also aren’t likely to invest in hiring the best technology implementation talent. As such, the service quality they deliver may not justify the expense for many organizations.
Yet another potential downside: larger firms tend to be less agile than their smaller counterparts. While they sell innovation to their customers, they are often too big and cumbersome to embrace the new ways of working and thinking that they promote on the consulting side. They have to rely on proven, repeatable methodology to remain efficient — even if it’s at the expense of better project outcomes for their customers.
Option 2: IT Outsourcing
Another option that is often used is outsourcing, which is when a company hires external resources – which are often cheap offshore or commodity offshore organizations – to manage various IT functions. Companies that specialize in IT outsourcing aren’t faring much better than the big consultancies. While they may be more cost effective than a large professional services provider or consultancy, many potential clients are becoming hesitant about working with them.
Too many times the old adage “you get what you pay for” has proven true when dealing with low-cost IT services. These companies still tend to lag behind in terms of the leading-edge methodologies that can generate better solutions and more successful projects.
Like the large technology consulting and professional services companies, the IT outsourcing companies also tend to rely on standard processes that can be repeated over and over to keep costs down. There’s no room for innovation. Many prospective customers want to hire a company that will offer up better options rather than just getting a job done as quickly and cheaply as possible.
Option 3: Cloud Systems Integrators
A viable option may be to go with a mid-sized company that specializes in technology implementation — particularly in the areas of cloud migration and cloud-native app development.
These are firms that focus solely on cloud technologies and services. They have the essential in-depth expertise and experience. Because they’ve been exclusively working in the area of cloud technologies, methodologies such as DevOps and agile development are standard ways of doing business.
Cloud systems integrators are able to be more innovative than larger companies that have no wiggle room for experimentation or exploring new methodologies. They’re continually seeking and trying out new and better ways of overcoming technology challenges and solving problems.
These companies develop solutions that can meet current requirements and adapt as those new requirements emerge. For many, their work for a customer is just the beginning of a much longer partnership that will evolve to help that customer continually leverage cloud technologies to meet changing needs.
Yet another advantage many of these cloud-centric service providers have over the large consulting companies and IT outsourcing firms is their niche focus. The big consultancies and outsourcing companies tend to be IT generalists. Each of the major cloud platforms offer hundreds of tools and services. It would be difficult for even the biggest among the outsourcing companies and consultancies to gain and maintain deep expertise in the full spectrum of resources offered by all of the cloud platforms.
However, many of the cloud-centric companies have chosen to focus their efforts on specific platforms, such as Amazon Web Services (AWS) or Microsoft, enabling them to gain familiarity with and expertise in the many tools and services those particular platforms offer. They can effectively leverage those resources to help their customers implement targeted, effective solutions.
Choose Your IT Service Provider Wisely
That’s not to say there still isn’t a place for the large technology consulting firms or IT outsourcing companies. But for companies that want the flexibility, scalability and cost benefits that cloud services provide, working with a company specializing in cloud technologies – as a true, long-time strategic business partner, rather than just a point-in-time technical resource – may be the optimal solution.
About the author:
Pavel Pragin is the CEO of ClearScale.