In House IT vs Outsourced IT: The Pros and Cons
7 MINUTE READ
Effectively managing the cost and performance of IT services is fundamental to success in modern business. If company computers are continually breaking down or causing other problems, productivity plummets.
Given what is at stake, business owners often find it difficult to decide whether to keep IT services in-house or outsource them to an established service provider. To ensure a business runs smoothly and maintains continual growth, few things are as important as having the right IT staffing and systems in place.
While most small businesses start off with a in-house IT department of one or two people, this is not always the right long-term solution. As the business expands, the requests made to the IT department will increase dramatically. If the in-house department struggles to keep up, the business run the risk of being hampered by bottlenecks in workflows, slow response times, and prolonged periods of downtime.
For this reason, when businesses reach a certain size, most find that outsourcing IT is the best strategy to cope with the increased workload. However, it is important to remember that there is no one size fits all solution when it comes to IT services. As each business is dealing with a unique set of circumstances, what works well for one may be completely ineffective for another.
To help you decide which solution makes most sense for your business, in this post we’ll explore the main pros and cons of in-house IT and outsourced solutions.
The pros of in-house IT
Knowledge of the business
As the IT department is housed within the office they will be familiar with how the business runs on a day-to-day basis. They will also have a good understanding of the ways employees and management are using their computers as well as the internal network itself. This information comes in handy when trying to quickly identify the source of an emerging problem.
A methodical approach
In-house IT staff usually work at a slower but more deliberate pace. This means that they can spend as much time as necessary to come up will a comprehensive solution to a particular problem. In addition, this usually enables them to create accompanying documentation of the all important processes implemented along the solution.
As the IT staff are onsite, if an emergency arises they can act immediately. This can help to minimise costly downtime.
The cons of in-house IT
As there are only a handful of staff to deal with requests, a big list of priority demands can build up quite quickly. As a consequence, necessary research and documentation can quickly fall off the priority list because the IT team is constantly putting out fires.
Holidays and sick leave
When you only have a limited number of IT staff to begin with, it can makes things extremely difficult when some of them are not in work. When staff return from holiday or sick leave, they could return to a huge pile of requests that need to be dealt with. Things can get even more problematic if there is only one person in the department. While they are away, there will be no one there to address problems that arise. Trying to fix the problem while they are gone could make the problem worse.
As a business continues to grow, in-house staffing can become extremely expensive. If a business requires an IT team with a comprehensive skill set, it is unlikely one or two IT professionals will be competent in all technical areas. Business owners may be forced to hire four or five separate IT professionals to ensure they have all bases covered. Pouring huge amounts of money into additional full time staff often limits possibilities for growth.
The pros of outsourced IT
Going above and beyond
An outside vendor has a vested interest to outperform expectations as they are not an employee. All vendors have a strong desire to win their client’s business year after year. This means they will often go the extra mile to exceed client expectations.
Free up internal resources
If IT is not central to a business’s product or service, it often makes sense to outsource it to free up resources for key internal functions. They can then maintain funds for other items directly related to their product or service.
Comprehensive skill set
As most vendors employ hundreds of technical specialists, no matter what the IT problem happens to be, they should have the necessary expertise on hand to reach a solution.
There is no downtime as there would be if an in-house employee goes off on holiday. Furthermore, there is very little downtime on the nights or weekends as the majority of IT providers will have a comprehensive support system including a full-time emergency contact.
Rival larger competitors
Outsourcing IT can help smaller businesses to access technology resources to rival their larger competitors – resources they couldn’t otherwise access. This can create a more level playing field between large and smaller companies
The cons of outsourced IT
Finding the right vendor
With so many different options available making a decision about which vendor to go with can feel overwhelming. Since IT affects almost everything a company does, time and effort must be invested to ensure a vendor is right for the business. Business owners should shop around to get a feel for which vendor best matches their needs and organisational culture. It is generally a bad idea to simply go with the cheapest vendor.
A good IT vendor should have a plan in place to respond to emergencies quickly. However, in some instances a larger client’s needs may take priority, pushing an “emergency” at a smaller business to the back of the queue.
Lack of face to face interaction
The rep from the IT service provider will only be onsite on rare occasions. The majority of the service issues will be handled remotely. Some business owners prefer not to work with exclusively remote support.
Security and liability
Bringing in a third-party can make issues around information and security more of a liability. This is a somewhat bigger concern when using an offshore company, where laws around privacy and security may be different. As the arrival of the new GDPR regulation is just around the corner, businesses should ask lots of questions about how the vendor will protect sensitive data, including both employee and product-related information.
As a business owner, the choice of whether to outsource IT services will always be a tough one. It takes careful consideration with the right team along with a comprehensive review of your current business structure to determine what’s going to work best for your company.