SMBs consistently rank “figuring out which IT solutions can best help my business” as one of their top IT challenges. So, I was interested in talking to Sanjeev Kapoor, Founder and CEO of IT Exchange—whose mission is to help SMBs around the world get access to high quality tech resources.
Laurie: Sanjeev, can you start by telling us about why you started IT Exchange?
Sanjeev: Sure. Before starting IT Exchange, we did a good bit of research on small and mid-sized businesses. Our analysis showed that high quality tech talent that is typically available to large enterprises is not available to SMBs and finding good tech resources is a significant challenge for them. Large IT giants like IBM or Accenture or even the offshore companies like Infosys and Tata focus on the Fortune 500 or Global 2000 —and SMBs often end with less than optimal IT talent. So, we decided to create a marketplace of small IT companies to provide the same level of services to SMBs worldwide and level the playing field for them. Now SMBs have a resource for high quality IT talent.
Laurie: IT Exchange is based in India, but you serve a lot of clients in the U.S. correct?
Sanjeev: Yes, we are global. We’re headquartered out of U.S. A lot of the back office work we do is out of India. Our customer base is mainly US and Europe and our supplier base includes a good mix of companies from India, China, Eastern Europe, Latin America, and the U.S.
Laurie: When did you start IT Exchange, and what are you learning about providing these services to SMBs?
Sanjeev: We started in 2012, when I left Infosys and began to focus on small businesses. SMBs have different needs and expectations when they want to outsource work as compared to larger companies. They have smaller budgets, and expect faster results—and it doesn’t make sense for large IT suppliers to service SMBs. So, we’re facilitating peer-to-peer relationships. When both parties are around the same size they’re keener to engage. Small businesses expect a fast turnaround, and want minimal overhead. They don’t plan 3 or 5-year projects—they want to see results in four to six weeks or eight to twelve weeks at most. It’s a very different world.
Laurie: These differences have made it tough for organizations to serve SMBs well.
Sanjeev: It is a very tough market. That’s why we’ve designed a marketplace approach, not every provider can actually serve this segment well. Some providers that want to sell to SMBs can’t because the cost of sales to SMBs is too high. But by acquiring business through our marketplace, they reduce their cost of sales. And the marketplace also motivates providers to deliver smaller projects not just the larger ones. It can help them optimize their talent pool more appropriately for this market.
Laurie: IT Exchange is qualifying a lead for the service providers, on the one hand, and, on the other hand, qualifying service providers for SMBs?
Sanjeev: Yes, that’s our value proposition to both sides. We’re helping providers acquire clients in a more predictable, cost-effective manner, which motivates them to deliver services to this segment. For SMB buyers, we secure high quality service providers. Today we have over 100,000 resources with over 500 types of technical skills on our marketplace including some very hard to find skills. SMBs can leverage this to access the variety and quality of talent the need to get their projects done.
Laurie: How can you ensure the quality of the providers?
Sanjeev: That is fundamental in our approach—making sure that providers can provide quality services. They go through a very rigorous process in which we evaluate their management, culture, and capabilities, and pinpoint their core strengths—where do they really shine? And we look at whether they have the processes in place to deliver good quality. In addition, we don’t just hand off a buyer to a supplier or vice versa. We remain engaged throughout the process to make sure a project is delivered and that outputs are achieved.
Laurie: What are some of the more popular services that IT Exchange provides?
Sanjeev: The scope is very wide but for instance, we get a lot of requests for ERP and CRM implementations things like Microsoft Dynamics. We also have a lot of clients that want to get e-commerce websites built, with Magento or similar tools, or even to build a custom site. People also request infrastructure work, for AWS or Azure, for instance, and for quality assurance support, data analytics, data warehouses—basically you name it, it’s a very wide spectrum.
Broadly, we can categorize our work into two main areas. First, the clients that are technology creators who want help to build something from the ground up. Second, we have clients that are more traditional companies that need to make better use of technology to support back office or client facing functions.
Laurie: What’s the process for SMBs who want to use IT Exchange?
Sanjeev: First, they can come to our website or just call us (+1408 385 9244). The very first thing we do is to assess their requirements and their buying maturity. Often, smaller companies aren’t really sure what they need, or they have very limited understanding of how to put together an RFP for what they want. We help them with this, and then do the matchmaking to shortlist a few companies that are good fit, and then narrow it down to one provider based on quality and cost. We create a contract between the buyer and the supplier, and then the project starts. IT Exchange provides project oversight, and our online platform also helps them track project status.
Laurie: What’s the typical size range for businesses using IT Exchange?
Sanjeev: Earlier I segmented the clients into two groups: the companies that create technologies and companies that use technologies. Technology creator companies could be very early startups, with just 5-person teams trying to develop a tech product, a cloud solution or a mobile app. Sometimes they come to us with an idea or a concept that they’d like to build out.
Then we have the second group, companies that are established, and they’re growing, but they can’t manage their needs without better systems and processes—usually these are between $50 million and $200 million in annual revenues. We also have some clients that are bigger. They have a decent IT back office team and we help augment their teams.
Laurie: Having worked with a lot of clients and providers, what’s the one piece of advice you’d give to SMBs who are trying to implement a new solution?
Sanjeev: The one most important thing is to keep it simple. Sometimes smaller companies expect too many things—maybe they’ve worked for larger companies—and their expectations don’t fit with their budget or their ability to digest new technology. Keep goals clear, define timelines and budgets with both internal and external stakeholders. We try to educate clients by packaging in a little bit of advisory for those that haven’t outsourced before so they have a more realistic expectations about what they can get with their budget, and where they are likely to see the best results. Our role is to guide them through the whole journey and to successful outcomes.
© SMB Group 2018