In-House or Outsourced IT: Which Is More Cost-Effective for Your Business?

In-House or Outsourced IT: Which Is More Cost-Effective for Your Business?

Making the decision to establish an in-house IT department or to outsource to a managed IT services provider (MSP) can be hard. Both options have pros and cons, and it’s important to weigh these carefully before coming to a conclusion about what’s right for your business.

In this blog, we’ll take a look at the benefits and drawbacks of each option so you can decide whether the costs of each setup align with your strategic plan. This will help you make an informed decision that fits both your business’s needs and budget.

The Benefits of In-House IT

Having an internal IT team comes with a suite of benefits, all connected to timeliness, familiarity, and control.

  • You can directly implement processes and procedures

Change is often quicker to implement when done in-house. With an MSP, they will likely follow a more thorough process which could take some additional time. That said, faster isn't always better, so make sure you consider the best long-term option for your business. Your IT department knows your business inside and out

  • No one knows you better than you

In-house IT staff are typically more familiar with your company's specific needs and how your systems work. This can be beneficial in implementing solutions tailored to your business. Some MSPs will offer packages with a lot of services, some of which you don’t need, but will still be required to pay for. This cookie-cutter approach is one we definitely don't recommend so make sure when you're qualifying MSPs to work with, you ask about how their solutions can be tailored to fit your unique business environment. 

The onboarding process at Charles IT was specifically designed to account for this and allows our team to get to know your business inside and out so when you work with us, it's like you're working with a member of your own team. 

  • You have full responsibility for your data

With an internal IT team, you are 100% responsible for how your data is stored, processed, and secured. If you have an internal team that’s able to provide this level of support, you're all set to experience the aforementioned benefits.

Ensuring your internal team is able to both support day-to-day IT functions and prevent costly data breaches can be a tall order. We've found that SMBs with an in-house IT department can hugely benefit from looking into partially outsourcing their IT and cybersecurity business needs. 

Related media: Discover how securing client data secures ROI

Considerations for In-House IT

While an in-house IT department provides a treasure trove of advantages, it’s not without its drawbacks.

  • It’s expensive to hire and train IT staff

In addition to paying steep salaries, you must also factor in the training, certification, hardware, software, and other employee benefits that come with staffing a full-time IT department. At a minimum, hosting a full in-house IT department can cost upwards of $250,000 per year.

  • In-house IT may not be as scalable as outsourced IT

Usually, when internal departments need to scale up, they have to buy and configure new hardware, hire or train more personnel, and go through tedious licensing procedures. MSPs require nothing more than a phone call or a request ticket to scale up their clients’ systems since they already have the necessary infrastructure and labor force to implement upgrades.

  • You are solely responsible for your data

With in-house IT, all tech processes, such as backups and redundancy, fall on your shoulders. Any type of hardware or software failure is also your problem to solve. This can be overwhelming and bog down smaller IT teams, not to mention take your focus away from running your business. All of which can hurt your bottom line.

When it comes to in-house IT, many factors must be considered to decide what will work best for your organization. There is, however, an option that keeps the core of your IT and cybersecurity fully in-house with an added layer. A virtual Chief Information Security Officer, or vCISO, is a dedicated security resource that works for an MSP with a full team behind them. This person would be your main IT and cybersecurity contact point for your company and head any project related to IT or security so your team doesn’t have to. This is a cheaper option than running everything in-house and still gives you the personal feel of your IT manager being part of the company.

The Benefits of Outsourced IT

Hiring an MSP for your IT needs comes with a multitude of benefits, most of which address the disadvantages, or struggles, that internal IT teams often face.

  • MSPs are normally less expensive than an internal IT department

With an MSP, you have access to a team of highly trained and certified IT professionals for less than what it would cost to hire and train just one internal specialist. Additionally, MSPs work with multiple businesses, allowing them to spread their own infrastructure and personnel costs evenly across their clients, which gives you access to discounted rates on hardware and software licensing, for example. 

  • MSPs give you time back to focus on what you do best: running your business

With an MSP taking care of either part or all of your IT and cybersecurity needs, you get the time back to focus on the day-to-day operations and the future of your company. Not only that, but a good MSP will also work with you to incorporate IT planning into your business's strategic plan so you can plan ahead and feel confident going into any compliance audit. 

  • MSPs are more scalable than in-house IT

You never have to worry about reaching a point where your needs suddenly exceed your team or infrastructure capacity. MSPs are able to quickly scale up their services when needed as your business grows. With a quality partner, you’ll also never pay for more service than what you actually require because MSPs can scale down just as easily. Essentially, you only pay for what you need.

Considerations for Outsourced IT

Although there are many benefits to outsourcing IT, there are still some things to consider before partnering with an MSP.

  • An MSP will have access to potentially sensitive company data

MSPs will have access to any data processed or stored through them. While companies usually have contracts that specify rules about accessing that data and penalties for violating those rules, you'll need to evaluate what this means for your business. If you're working with a good MSP, you shouldn't be worried about this, but it's always good to evaluate and ask questions before moving forward. 

Determine what you’re comfortable with and be open with any MSP partner you’re considering. It’s better to ask the questions up-front to ensure you know how sensitive data will be handled and that you’re comfortable with the arrangement. 

  • Beware MSPs that offer a one-size-fits-all solution

It’s unfortunate, but some MSPs lack the ability to personalize their services to each company they work with and instead offer a generic service package. Every business is unique and there is no such thing as a one-size-fits-all IT and cybersecurity solution. If your business has specific requirements, ensure you're getting the tailored support you need from your provider. This is why it’s critical to do the research ahead of time and find an MSP that can collaborate effectively with your company.

Although a generic service package may be less costly in the short term, you’ll likely end up paying for it in the long run. 

Hot Tip: Have an up-to-date IT and cybersecurity audit done so you understand exactly what your business needs before entering into a partnership with an MSP. 

When is Outsourcing Your IT the More Cost-Effective Choice?

There are several factors to consider when deciding between outsourcing your IT or managing an in-house IT department. However, if any of the following situations apply to your business, then outsourcing is your best bet. 

1. You Want to Save Money

This will depend on the size of your business, but partnering with an MSP will help you cut down on operational costs. It will save you from having to invest extensively in personnel, training, certifications, and infrastructure.

2. Your Business is Growing Rapidly

If you’re experiencing steady growth but don’t have the resources to keep up with the associated IT and cybersecurity demand, an MSP can help support your growth with scalable and customized solutions, along with expert advice.

3. Your Employees Need Support for a Wide Range of Systems and Applications

Outsourced IT providers typically have experience dealing with a wide range of businesses, so they can provide support for a variety of systems and applications. This minimizes the need for specialized training, saving you time and money.

4. There’s A Wide Gap Between the Tech You Have and the Tech You Need

For example, If you need to implement a security service but don't have the internal technical expertise, it makes more sense to find an MSP to do it for you. They have a team of specialists who are experienced in various fields and have the skill set to help you elevate your current security. 

5. You’re Thinking About Long-Term Sustainability

Outsourcing can help you put more focus on running your internal operations. This, in turn, allows your business to excel in the present so that you can achieve your long-term goals. Keep in mind, however, that you should take the time to evaluate which tasks need to be outsourced and bring your MSP into the conversation as well. 

If you think outsourcing your IT is right for your business, then partner with one of the most trusted MSPs in the state: Charles IT. We have years of experience in outsourced IT services and can provide your business with the support it needs to get things done efficiently and effectively. Schedule an appointment with Charles IT today!

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