IT Providers: Strategic Partner vs Reactive Provider

18 April 2023
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In the UK, there is no regulation in the IT industry so there are no defined set of standards for the services that IT providers provide. An IT Provider is a third-party tasked with remotely managing a customer’s IT infrastructure and devices.

Given the lack of standardisation, choosing an IT Provider that adds optimal value to your business can be challenging.

They often fall into two categories: strategic partners and reactive providers, each distinguished by critical differences, particularly in billing models.

 

Strategic IT Partner:

A strategic partnership with an IT provider involves a holistic approach to understanding your business, from strategic decisions at the board level to everyday operations. This collaboration aims to align IT solutions with the broader business strategy, accounting for risk tolerance and current risk management strategies. The partnership model is built on value, and the billing model reflects this – payment is made for both the service and the value delivered.

Strategic IT is suited for businesses recognising IT as a mission-critical investment rather than an operational cost.

Benefits:

  • Adds value to the entire business at both strategic and operational levels.
  • Promotes mutual success by assessing business risks and holding you accountable.
  • Transparent advice and reporting.
  • Tailored implementation of a solid IT function to suit your business’s unique needs.
  • High responsiveness to IT issues.
  • The risk and responsibility lie with the partner, not you.

Risks:

  • May be perceived as expensive compared to a reactive provider.
  • May have limited capacity for new business due to personalisation of services for all their clients.
  • Not suited to certain types of business models.

 

Reactive IT Provider:

Reactive providers, often termed ‘break-fix’ providers, focus on fixing IT issues without deeper analysis of how IT complements the broader business strategy. Billing models typically include time and materials (TMN) or block hours, where you pay for the hours of service or a block of time each month.

Benefits:

  • Potentially ‘cheaper’ than strategic partners.
  • Pay only for the hours you need.
  • May offer better value with a ‘roll-over’ contract.

Risks:

  • Adds little value to the entire business.
  • Places the risk on the client.
  • Lacks incentive to prevent issues.
  • Does not hold clients accountable for decisions.
  • Not proactive in system monitoring.
  • Potential added stress with block hours billing method.

 

Choosing Your Ideal IT Provider:

Understanding the risks and benefits is crucial when choosing an IT provider.

The ‘Riskometer’ chart above emphasises the potential risks involved. With a reactive provider, the risk is shouldered by YOU as the client, whereas a strategic partner takes on the responsibility and risk, having been paid for both value and service.

When comparing the costs of a reactive provider and a strategic partner, avoid getting stung by ‘headline prices.’ While reactive providers may seem cheaper on the surface, hidden costs often emerge in terms of time and money. Contracts should be scrutinised for unexpected charges.

In conclusion, there is no right or wrong choice of IT provider. It’s about defining the type of Business Leader you want to be and the business you aim to build.

Take our quick fire, no email address needed, 2-minute quiz to receive some personalised resources on dependent on your situation to help you to relieve some of your IT frustrations.

Click here to take Are You An IT-Lost Business Leader quiz now!

 

What our customers say

Lumina Technologies have taken the time to understand the requirements of our business and work as our strategic IT partner, enabling us to concentrate on delivering a high quality service to our clients and focus on our growth strategy. They have delivered a 100% cloud solution to our business with no underlying infrastructure costs or maintenance, which gives us scalability for our planned growth. It also means our business critical applications and data are securely accessible from virtually all our user devices. Lumina’s professional approach and strategic expertise is highly valued and their management of our IT – based on their in-depth knowledge, leaves us confident that our systems are available 24×7.

Luke Harrison
Keidan Harrison LLP

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