The age-old debate of many organisations is: will an outsourced IT provider or an in-house team be best? And as you look all over the internet, there’ll be compelling arguments for both, albeit likely to be biased. However, the genuine answer to this debate will depend on your business, its needs, size, industry, and budgetary requirements. There is no simple answer.
You’ve probably remained with the IT set-up that you’ve had without a sense check for a while. But is this right for your business in the coming years? Let’s look at the pros and cons of both outsourced and in-house IT.
We start by clearly outlining what we mean by outsourced IT. Gartner defines it as using external service providers to deliver IT-enabled processes, application services and infrastructure solutions for business outcomes. Outsourcing can be delivered in various forms, from simple software installation and management all the way through to managing your complete IT infrastructure.
As with any supplier, you shouldn’t just opt for the most local or the cheapest. Careful consideration is required as you’ll need a provider that can deliver you the most value to your business. From industry expertise to the average time it takes them to resolve an issue. Additionally, your IT provider should be working alongside your business strategy to help the business achieve its goals.
The Pros of Outsourced IT Providers
As with almost all things in life, there are positives and negatives when choosing how to run your IT. Here are the pros of outsourced IT:
Allows you to focus on your core business
You can get back to managing the core functions of your business that deliver products or services to your customers. You’ll no longer have the dreaded IT headache worrying about whether your business can offer its products or services. You’ll be able to work productively, leaving IT to the experts.
Access to a great talent pool
The nature of an IT provider is that they’ll have a team consisting of different specialisms and interests, as they need to solve a wide range of problems across an array of clients. In comparison, an in-house team comprising a couple of people will have limited knowledge and experience of more complicated issues. This is predominantly due to not having exposure to such a wide variety of systems and solutions.
Reduction in personnel size and the associated management
As there would be no IT department, there would be a reduction in the office space and equipment required, less pressure on the management of personnel, no concerns around the holiday and sick leave cover, and a reduction in costs related to ongoing IT training.
With an outsourced IT provider, you’ll have access to a larger service desk. To have the equivalent in-house will require your business to recruit a couple of full-time salaried IT employees. Not only that, but your IT provider will charge your services for a defined period, and therefore you’ve got an agreed set monthly cost if there are no additional projects to be included.
The Cons of Outsourced IT Providers
And now onto the negatives of outsourced IT:
There are so many IT providers out there to choose from, and it is easy to compare them based on price. On the surface, it looks like each provider is providing you with the same level of service. Until you investigate the detail. Many IT providers will offer a backup service, which could be anywhere from a 7-day backup to a 30-day backup. You might be required by law to have a 30-day backup, and you’re not receiving that level of service. You must meticulously evaluate your IT provider before selecting them.
Once your IT provider is set up working with your business, you may find it tough to step back from the day-to-day running and management of IT. You may feel that you still need to have control over the everyday IT problems. But you should let the IT provider manage those. Your involvement will become more prevalent in large IT projects where the IT provider needs to consult with you and the broader business management team.
Often, there are issues with communication between the IT provider and your business, and vice-versa. From describing business goals and problems to the IT provider efficiently, or the IT provider clearly explaining the reasons behind an issue and what the resolution will entail. It can lead to the breakdown of a relationship between the two parties and ends with them working against each other.
Contracting can be expensive
If you decide that you only need a single IT staff member or someone to work on a specific project, you may opt for contracting. However, they can command a much higher hourly rate than someone of the same experience employed in-house. It’s often difficult to find some with the right balance of a specific skill set but still wide enough to manage a broader range of problems.
In-House IT Departments
In-house is the opposite of an outsourced IT provider. You’ve got an in-house team who manage all your IT requirements from software to infrastructure. The size and expertise of your in-house team will be dependent on the business needs.
Just as you would with selecting an IT provider, you need to recruit the right people to complement your business culture and achieve your business goals. While it can be hard to recruit for such positions, don’t hire anyone because you need someone to fill the role.
Pros of an In-House IT Team
Let’s move onto the benefits of an in-house IT team:
You’ve got a level of control over an in-house IT that you don’t have with an external provider. For some company owners, it’s vital they can control the teamwork internally and the processes in place. Ultimately, it’s their company, and they can feel more comfortable with a hands-on approach.
A deeper understanding of the company
An internal IT department will better understand the company, its goals, the internal process, and current projects. It means there’s less time needed to explain as you would need to with an outsourced IT provider. The IT department can crack on with their projects with little hand-holding involved.
Dedicated on-site help
The nature of an in-house team means your business has an on-site or direct contact who are likely to be immediately available to deal with any issues. These can range from simple password resets, the configuration of computers and laptops to setting up a new server or completing upgrades when necessary. Additionally, some employees will find more comfort in someone they know dealing with such issues.
You’re responsible for the personal development and training of your employees. This allows you to shape the skillset of your IT department to suit your overall business requirements. If the employees are happy to develop their skills, your business will benefit from having a dedicated skillset for your needs.
Cons of an In-House IT Team
And now onto the negatives of having an internal IT department:
An internal IT department can quickly become expensive. You’re likely to need more than one salaried employee to cover sickness and holidays. Additionally, you’ll need to cover the cost of additional hardware, software, and equipment they need to complete their job to the best of their ability. Plus, the cost of ongoing training is on top of all of that. It soon adds up to be more costly than you initially thought.
Recruiting an individual who’s a good fit and has the right skill set is challenging. You need to take your time and not feel pressured to hire the first person who might be okay. Later down the line, it may harm your business, an unhappy employee, and an unhappy employer.
Narrower technical knowledge
As IT departments are smaller than an IT provider, the level of knowledge and experience will be narrower. An unknown complex issue will take more time to research and fix the problem. An IT provider with several more employees has a sounding board where someone might have previously experienced such an issue. Continuous training is essential for an internal IT department.
Unless you work in a large organisation, you’ll likely have between 1-3 employees working in the IT department. And like every other employee, they’re entitled to holiday leave and occasionally may be absent due to sickness. There’ll be concerns around the speed of resolving IT issues and the impact this may have on projects. It may impact the overall productivity of your business.
What about combining an outsourced IT provider with an in-house IT department?
Many use an outsourced IT provider with an in-house IT department to reap the benefits. It eliminates several of the cons of both an outsourced IT provider and an in-house IT department:
- Absences and sickness isn’t an issue as it can be covered,
- There’s access to knowledge and experience of the company and IT issues on both sides,
- Employees still have a dedicated point of contact on-site if they require,
- Your management team may feel more confident to step away from the day-to-day IT activities.
The management of your IT is ultimately based on business needs, size, industry, and budgetary requirements. These should be considered alongside the pros and cons listed above. Don’t just make snap decisions. Take the time to carefully consider what will be the best fit for your business.
Are you interested in an outsourced IT provider? Please get in touch here or call us on 0345 504 8989.