Outsourced IT vs In-house IT
To outsource or to keep in-house?
The most asked questions about outsourcing your IT support vs in-house department.
Are you thinking what would suit you better – outsourcing or in-house? After reading this article you will be able to make an educated and informed decision of what is best for you and your business. When making a decision whether you should invest / or continue your internal IT department or outsource your IT to a managed service provider, there are few most important factors that must be considered. Having to think about each one of them, will help you make that decision.
Outsourcing your IT will almost always be cheaper than having staff on payroll. There’s a lot of costs associated with employees. Apart from the obvious wages, NI and pension, there are also hidden and not so obvious recruitment costs, onboarding, training, annual leave, sick leave, parental leave, payroll costs, office space, computer equipment, consumables, insurance, just to name a few! These can sometimes double the salary! As a comparison, you will usually pay a flat rate per user to your IT support provider, and won’t have to worry about any of the above.
So let’s have a look at some examples.
Scenario 1 – 25 office based employees.
- Outsourcing costs – between £25 and £50 per user depending on complexity of the system. Flat rate between £625 to £1,250 per month
- Internal department – one mid range IT support technician. Salary between 25k and 35k depending on experience. Add: 13.8% NI, 5% pension that’s between £2,475 and £3,465 per month. Then add all other hidden costs as mentioned above.
Scenario 2 – 100 employees in various offices around the country
- Outsourcing costs – between £25 and £50 per user depending on complexity of the system. Flat rate between £2,500 to £5,000 per month
- Internal department – One mid range IT technician and IT Manager. Salary between 25k and 35k for the technician and 40k to 50k for manager depending on experience. Add: 13.8% NI, 5% pension that’s between £6,435 and £8,415 per month. Then again, add all other hidden costs as mentioned above.
Your employees will mostly always be available to you onsite while at work during your normal business hours. Whereas an outsourced IT provider may be working at more urgent request from other customers, making your issue less important. However this isn’t always as straight cut.
There’s rarely a steady supply of IT requests. It’s either silence before the storm, or the storm. This may mean that you might have your IT staff available on site, but they will not be able to deal with all issues at once. The only advantage is that you can help to prioritise those requests, and decide what gets dealt with first. Similarly, the same storm may hit your IT service provider. While they may have more resources to work on, you will have no influence on their priority list. This does not mean your SLA’s will not be met if your provider is busy with requests. It simply means that you may have to wait more than 10 minutes.
3. Technical Competency
IT Support companies will be expert in their field and most likely have dealt with the same issue before. This means they can resolve issues faster. In comparison, your onsite employees may be experts in some specific areas of IT, but not all. The same technical problem may take them longer to resolve, if this is the first time they came across it.
Let’s take an example of a problematic laptop that just doesn’t work! It constantly gives you ‘blue screens of death’, is unreliable and never works when you need it most. Heard that before? When you report the issue to your internal IT department, the typical response is to bring it for them to have a look at. Sod’s law, it always works when they are around and it can take weeks before they witness the problem and acknowledge it. It then takes a long time to investigate before finding the solution that works. On the other hand, the same request sent to your IT provider, may result in a quick realisation that there’s a faulty update in this particular model, which causes all the issues. They know, because they had similar problems with other customers and are able to identify this very quickly. Knowledge sharing is a powerful thing.
4. Understanding business needs
Your employees are with your business every day so will have a better understanding of what the business may need. Employee onboarding, company culture, meetings and water cooler chats are a great way to gain company insights and understand the business needs. In contracts, it can be difficult for IT support providers to be intimately involved with all businesses they support. They are not privy to company culture or those water cooler chats. They will have their own culture and their own chats that they need to nurture and promote.
Let’s take a look at the following example. Your laptop is playing up. It’s slow, it takes ages for any page to load. You get frustrated and ask for a new one.
- If you ask your IT provider, they will most likely fulfill your request to a satisfactory result. You might be asked for spec and what’s important in this laptop for you. You will have a new laptop, pre-installed and pre-configured in no time.
- If you ask your onsite IT employee, they may match the dots and realise that it is not only you who have problems with how slow pages load. Other users complained about that, and a quick investigation leads to the conclusion that it is wifi that is slow, not laptops. Wifi needs an upgrade.
This by all means does not mean that IT service providers wont realise that its wifi, not laptop. Any good company will ask questions and will figure that out. And the same goes for onsite staff, not all can we figure it out and simply follow instructions / requests. Just in theory, it should be easier for onsite staff to use the day-to-day activities and operations to make better informed decisions for the business.
5. Responsibility and assurance
When dealing with very difficult tasks, onsite employees will do as much as they can but they still may not be able to fix the issue. A service company has to resolve the issue as their entire business is based on it.
Depending on a company and how dependent it is on its IT systems, IT, whether is working or not, can make or break the business. If all your communication with customers is using some sort of technology, you collect, keep or process customer data, and your employees cannot do any work if systems are down, you can honestly say you’re highly dependent on your IT. Total loss of the system, could result in your company not ever being able to recover from that loss.
When things go wrong, and at some point in time they always do, you need to be surrounded by people who can help you.
- If you can afford a multi skilled and experienced IT team, that’s great. They will be there to help you. You need to trust their skills, experience and commitment to sort you out in need.
- If you cannot honestly admit to yourself that your IT team will get you out of trouble, then you should consider getting that assurance from an IT company.
Old school of thought says you should never outsource activities core to your business. In other words, if it’s too important – keep in house. If you can, that is.
If IT is only a supporting function within your company, it can easily be outsourced. For example, if all you need is IT for communications (email, phones), wifi, document sharing, accounting and printing, then outsourcing will work very well for you. If on another hand, you create and maintain your own systems and software, use legacy applications or have highly customised solutions, having an onsite team may be best suited for you.
There’s no better or worse option when choosing whether to outsource or in-house but above factors are amongst the most important ones that need to be considered.
Factors that work for outsourcing are cheaper cost, technical competency and assurance that they will provide solutions to your problem or need. Factors that work for an onsite team is understanding business needs.