Throughout the years, one age-old question has haunted CFOs and IT managers alike: is it better to hire an in-house IT team, or outsource to a managed service provider (MSP)? Each strategy comes with advantages and challenges that can impact your business in different ways. Unfortunately, this makes it very difficult to choose between the two.
Making the right decision will require an in-depth understanding of the differences between in-house IT vs outsourcing, as well as your own business needs.
Cost Comparison: Managed IT Services vs Outsourcing
At first glance, maintaining an internal IT team seems like a cost-effective strategy. Salaries are relatively predictable, and you have staff on hand for any situation. However, this mindset fails to account for:
- The number of staff required
- Benefits (such as annual leave)
- The time required to train them, both upfront and ongoing
- Office space and equipment
Most importantly, it ignores the fact that your staffing needs will not remain consistent. Each time your business scales or an employee moves on to their next role, the entire process starts over. This essentially makes all of these expenses recurring. What once seemed like a straightforward investment becomes quite complex, once these factors are considered.
Managed services, by comparison, charge only a single monthly fee that leverages economies of scale. While the upfront investment might be higher than hiring a single staff member, it provides access to a full team of experts. You don’t pay for equipment, office space, benefits, or replacements. And as your business grows, the managed service provider (MSP) offers more resources to help you adjust. These factors make cost management one of the biggest advantages of outsourcing.
Efficiency and Productivity
When considering any investment, you must consider the potential ROI. In-house staff are easily accessible when you need them – during their work hours, of course. They also work only for you, which means they spend their entire day completing tasks that benefit your business. Because of this, your investment does pay off in terms of efficiency.
An outsourced team, however, carries its own benefits. While in-house staff are available faster, MSPs provide 24/7 monitoring. The larger team size also allows them to proactively address small inefficiencies that internal staff might be forced to ignore due to time constraints. Over time, this leads to higher productivity.
Risk Management, Security, and Compliance
As cyber threats continue to evolve, security becomes a top priority for every business. This is where the larger team an MSP offers can be particularly useful. Advanced security measures that leverage the latest technologies, 24/7 threat detection, and full compliance support make it far easier to avoid data breaches. In turn, this protects your business from:
- Data loss
- Financial penalties
- Legal issues
- Reputational damage
While in-house staff significantly improve your data security in their own right, they simply don’t have access to the same resources as a larger team. Threat monitoring is particularly time-consuming, and will not be realistic on a continuous basis for small businesses. This means threats are more likely to go undetected, putting your data at risk.
The Impact of Expertise
Attracting and retaining high-quality IT talent is challenging at the best of times. For small and mid-sized businesses (SMBs), it can be almost impossible. Larger corporations can offer higher salaries and better benefits, making them far more attractive to a potential employee.
This is one of the main reasons businesses ultimately decide to outsource. MSPs hire a variety of IT experts who specialise in unique fields, granting them a deep pool of knowledge to pull from. When outsourcing, you gain access to all of this knowledge at a reduced cost. Response times get shorter, more effective IT initiatives are planned, and your business strategy becomes smarter.
The Disadvantages of Managed IT Services
When it comes to outsourcing IT services, the benefits do come with a few challenges:
- Control: While you still have the final say, interacting with a third party does inherently involve relinquishing a small amount of control. Some businesses may find this uncomfortable.
- Vendor Dependency: Poorly managed provider-client relationships may result in lock-in or a growing dependence on their services, putting you in a difficult position if you decide they no longer suit your needs.
- Coordination: When using an MSP to supplement your existing IT staff, coordination between both teams can become tricky. Misalignments may result in inefficiencies or unaddressed issues.
Addressing these challenges is as simple as choosing the right MSP. Your ideal partner should communicate clearly, respond quickly, and take an active interest in your business. Look for these traits, and you cannot go wrong.
Managed IT Services vs Outsourcing: Which is Best?
Ultimately, you are the only person who can make this decision. But if you’re having difficulty making up your mind, ask these questions:
- Do you have in-house staff already?
- If yes, is your current team handling their workload without feeling overwhelmed?
- Does all of your technology get replaced/updated/upgraded on schedule?
- Are security gaps and outages quickly and efficiently addressed?
- If you call for your team, do they answer in a timely manner? If they don’t, this may indicate that they are overworked and are not keeping up with their tasks.
- Are new initiatives regularly carried out that align with your overall goals?
- Could you afford to hire more full-time staff, if this became necessary?
- Do you feel confident that your IT infrastructure can support your future growth plans?
If the answer to any of these questions is not a firm “Yes”, then it may be time to consider the benefits of IT outsourcing.
FAQs
Can an MSP Work Alongside My Existing Team?
Yes, any MSP you hire should be able to work with your in-house team to solve challenges as one unit. If they cannot do this, they are not the right fit for your business.
Are there any industries where in-house IT is better?
There are no specific industries that cannot benefit from managed services. In fact, highly-regulated industries with specific compliance needs might find an MSP particularly useful for maintaining a strong security posture.
How do I choose a reliable managed service provider?
The right MSP will have a proven history of success. Look for case studies and testimonials from businesses in your industry.
What if I Need More Hands-Off Support?
You may only require advice, rather than hands-on IT management. In this case, IT consulting services may be more suited to your needs.
Get Started on Your Journey Towards Stronger, More Cost-Effective IT
IT outsourcing’s benefits and disadvantages are numerous. When compared with an in-house team, it provides many advantages that could help your business succeed in the long run – but it also comes with challenges. By considering your unique business factors and needs, you will make the choice that keeps IT aligned with your goals and ensures profitability.
The first step is identifying your existing IT infrastructure, so you can determine your needs. And iCare Cyber has you covered. Read our step-by-step guide to start on your journey towards a stronger, more cost-effective IT infrastructure.