As a managed service provider, we’re often asked whether a company should outsource their IT, stick to an internal IT department, or utilize both options. The truth, unfortunately, is there’s no one-size-fits-all answer to this question. While MSPs and traditional outsourced IT services are happy to help just about anyone, the right choice for you depends entirely on your unique business.
As a result, today we’re not going to make recommendations. Instead, we’ll cover some of the benefits and drawbacks of each method. It’s our hope that this will help you make an informed decision about which is right for you.
Internal IT Department
Internal IT departments were once a necessity and they’re still a mainstay in many businesses. Many IT tasks can be outsourced these days. The question is whether an organization should, or want to outsource these tasks.
If you recruit the right people, with the right experience and qualifications, an internal IT department allows you to custom build a team. They will have specific, in-depth knowledge about your business and its specific IT needs. Their day-to-day activities are focused entirely on your company. You can have a direct influence on their training.
An on-site team can also be useful if there’s an outage or other emergency. While most issues can be fixed remotely, an internal IT department does not have to travel far to fix any on-site problems. While this is typically only an advantage if the problem occurs during working hours or they’re on-call, it's undoubtedly a useful resource.
Finally, an internal IT department gives you more direct control over your data and where it travels. The vast majority of providers have an excellent reputation for data security and can also offer additional security measures, but not all providers are dependable. An internal IT department could be the right choice if there aren’t any reputable options in your area or price range.
There’s a reason IT outsourcing has grown significantly over the past ten years. The main barrier to an internal IT department is cost. As well as one-off recruitment fees, there are salaries to consider. With a service desk technician salary averaging $41k a year and an IT manager $85k, costs quickly add up. On top of that, there are expenses of regular training, qualification updates, conferences, and management software licenses.
While some organizations opt for a small internal department because of this, that’s rarely optimal. A small on-site department is unlikely to have the expertise in all of the areas your business needs. This is especially true considering the IT skills gap in some regions. It can create a reliance on contractors in some cases, which ultimately adds to expenses significantly.
Further, if a technician in a small IT department gets ill or takes holiday, it can cause significant issues for the business. This is particularly true when it comes to emergency response, as organizations cannot expect a few employees to be on call 24/7, 365 days a year.
Outsourced IT department
The natural remedy to many of these issues is to outsource your company’s IT entirely. However, this also comes with some challenges.
The primary advantage of fully outsourcing is the wide range of expertise and sophistication a vendor can offer. By specializing in IT services, the company can hire the best in their field across a variety of different disciplines.
The increased volume of technicians also means that you can have support 24 hours a day, year-round. Providers have the staff to ensure there is always cover, even on holidays. The majority of issues can be fixed remotely in minutes, and many providers offer fast callouts for problems that can’t be. Service Level Agreements with your provider will define which issues should be prioritized, average remediation times, and penalties should they fail to meet them.
Of course, another major factor behind IT outsourcing is the cost. While this should never be the sole factor in the decision, it is a major consideration. Entirely outsourcing IT cuts out recruitment and training costs and adds to predictability. Outsourced IT is typically billed on a monthly or per user basis. This allows an organization better plan finances for their other operations.
While some argue that sensitive data is best kept in the hands of internal IT, the opposite can be true. Having highly qualified and vetted technicians on hand to manage your deployment and operations can significantly reduce the chance of a data breach. This is especially true when compared to a small IT department.
There are a few challenges to consider when it comes to outsourced IT. For starters, you inherently have less direct control over the technological operations of your business. While in many cases this leads to reduced stress, there are instances where a company may want a high level of control over its processes.
Further issues arise if your provider has poor service. Lack of proper communication can cause all kinds of conflict. This can be especially true if the provider is in a different time zone than you are.
Outsourcing can also impact office culture. Having a physical space for IT can foster relationships with the wider company and provide a feeling of security for the less technologically minded.
Hybrid IT Approach
In an attempt to gain the benefits of internal and external IT, it’s very common for organizations to adopt a hybrid approach. They outsource some aspects of their operations to a Managed Service Provider, such as their cloud infrastructure, and have on-site technicians for other issues.
If managed correctly, a hybrid IT approach can increase innovation and employee satisfaction. A provider can work in the background to keep day-to-day operations running smoothly, freeing up the internal IT department to work on larger projects and brainstorm ideas to drive the company forward.
Alternatively, a smaller internal department can perform common tasks that don’t require specific expertise. They can handle printer jams, for example, or basic hardware and software issues. The hybrid approach in general allows a large degree of flexibility.
Additionally, the hybrid model allows a company to maintain a team that’s intimately familiar and trained in their systems while tapping into the broad expertise a provider can offer. Where there’s overlap, outsourced IT may be able to stand-in during absences in the internal team.
Of course, having a combination of internal and outsourced IT is often the most expensive option. You have to pay your monthly service provider bill plus recruitment and salary for internal IT. This removes some of the consistency advantages offered if you fully outsource.
If not managed properly, communication between internal IT and outsourced IT can also become a problem. You must take care to ensure each team remains updated on what the other is doing so that no conflicts arise. These types of conflicts can be indicative of a poor quality MSP.
Finally, some hybrid models tend to arise not through careful planning, but by accident. An organization may start with outsourced IT and hire someone to control a specific on-site aspect, only for the team to grow as they take on more responsibility. Without proper planning, such a model can become unsustainable or cause frustrating inefficiencies.
Making Decisions for Your Business
As you may realize, no one system is perfect. What’s best for your organization truly depends on how well you can weather the disadvantages and how much the pros will advance your business. A decision should be based not on one factor but after careful consideration of the entire picture.
That said, having some form of outsourced IT is becoming increasingly common. With the IT skills gap and a growing need for strong security, outside help can be invaluable. This, combined with the cost, makes at least some outsourcing suitable for most organizations.
If you’d like to discover whether partnering with an MSP is right for you, get in touch with VirtuWorks for a free consultation.