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In-House IT vs. Outsourcing IT: An Honest Comparison

In-House IT vs. Outsourcing IT: An Honest Comparison

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Are you a business owner trying to decide between housing an internal IT branch or outsourcing IT to a managed service provider (MSP)?

As the CEO of a company, and the central figure responsible for the operations and success of PalmTech Computer Solutions, I fully understand how these decisions must be weighed out carefully and strategically. PalmTech Computer Solutions caters to small and medium sized businesses as an IT Managed Service Provider (MSP). Small and medium sized enterprises are often underserved and lack the same resources as larger companies, although they represent for the majority of businesses and job creations globally. So, I find it important to contribute to the success of these enterprises by providing an exceptional experience when servicing their IT needs. Along the way I have also discovered that outsourcing your IT needs to a third party may not always be the best option for your business.   

There are three important pillars to consider when making your decision: level of expertise, management bandwidth, and costs. This article is going to guide you through the pros and cons between the two types of service models in an honest and transparent fashion; that way, by the end of this article you will feel confident in making the best purchasing decision for your company, even if that means not choosing us or any MSP at all.  

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Level of Expertise 

MSP

MSP’s have more experience and provide a wider set of skills to resolve your IT issues.  MSP engineers likely have more certifications and higher levels of qualifications due to a depth and breadth of experience working as a team. Not to mention the progress that can be accomplished when you have the sheer manpower of multiple IT specialists working toward a common goal: recovering lost or stolen data, email migrations to the Cloud, installing and implementing a new server—there are no issues that cannot be resolved. The possibilities are endless, just like the world of IT. Inevitably, there will be a learning curve in the beginning as your MSP gains familiarity with your network, but it will not take long before the experts come up to speed. 

 

In-House 

When housing an internal IT department, you may experience less of a disconnect or buffer than when onboarding an MSP. Your internal IT specialists know the ins and outs of your business’ network infrastructure like the back of their hand, so you will always have someone on-site for immediate assistance. Since internal IT only works with one system configuration, there is more time and effort retained to focus on improving the quality and functionality of your business’ network and systems. However, finding extremely competent and highly qualified IT specialists are growing increasingly difficult. If (and when) disaster strikes or your network takes a hit and your technicians are not qualified enough to remediate the problem, you will likely find yourself rushing to find a qualified technician to restore the integrity of your IT infrastructure, which means your wallet takes a hit too.   

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Management 

MSP 

It is safe to say that when you outsource your IT needs to a third party, you are freeing up a lot of time and energy spent in managing internal IT. You are no longer concerned with retention of employees and their knowledge, as you have 24/7 availability to a full team of experts. By eliminating the hiring and training process of new employees, you have more visibility and time to focus on the core obligations of your business.  You may also find that you achieve a better quality of service.  Why would the “quality” be better?  Because MSP’s work as a team, they use a standard set of tools, processes, and documentation to maintain a high level of organization.  Often, non-IT executives and business owners understand the management of their own core businesses, but not the science of IT and data management.  This often makes it difficult for a manager to know if their IT department is utilizing best practices in the industry.  An MSP must manage using the best processes and practices available because they are dealing with dozens of different kinds of businesses.  This adherence to high standards provides a much better and more efficient experience for the business. 

  

In-House 

All business owners know that having more employees means more resources are allocated to managing those employees. Having an on-premises IT department means you do not have to call a third-party provider and wait for a response—you can just ping someone in the other room to come work their magic in a matter of minutes. The convenience that comes with IT living and breathing in the other room is unmatched; but this is only a commodity if your IT department is well staffed and reliable. Sick days, vacations, and absences will affect business functionality and productivity.  Another management issue in-house teams face is lack of professional growth.  Because they are only tasked with support a limited number of technologies, they burn out quicker and they are not challenged so their skills set atrophy.  

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Cost 

MSP 

The key difference between in costs between an MSP and internal IT are options—with MSPs, you have the luxury of choices. MSPs offer a range of payment options and services, giving you a selection to choose from what best suits your business’ needs. This kind of flexibility is not really possible if you have an IT department on site. MSPs provide scalability, allowing you to rise to higher levels of services as time goes on and your business expands. If your business is on the smaller side and your network is fairly simple, you may only require minimal assistance and a smaller bundle of services.  If your company has a larger number of users, you might opt for a more complete bundle of services that include enhanced security options.  Most MSP’s also provide access to a “virtual” CIO that will help you develop a multi-year budget for proper asset rotation. The great thing about all of this is that it is provided for a fixed monthly fee.  No hidden costs. 

In-House 

If you can find IT specialists who are reliable, highly qualified, AND affordable…well then that’s kind of a slam-dunk. But good IT specialists know their skill sets are coveted in the enterprise and the best practitioners demand high salaries, not to mention paying for their insurance, PTO, and other benefits.  This often adds more than 25% to their direct salary cost.  In addition, many projects in IT must be completed at night and on weekends to avoid downtime for the entire staff.  IT personnel are non-exempt under Federal rules so overtime can add up quickly.  Another cost that needs to be factored in is temporary help when your in-house team leaves for vacation or is sick.  You must also bear the cost of your own tools (Anti-Virus, security tools, ticketing systems, documentation systems) that are often absorbed and included in MSP offerings. 

 

Outsourcing IT to an MSP works well if you: 

  • Do not have the time and resources to manage another internal department.  
  • Have a limited budget designated for IT.  
  • Want flexibility in your expenditure. 
  • Desire service that is available 24/7.  
  • Possess a complex network configuration that requires higher levels of expertise.  

Housing an internal IT branch works well if you: 

  • Need a specialist on-site every day.  
  • Have a larger budget designated for IT for the convenience of having an in-house team.  
  • Want full control and management of your IT infrastructure. 
  • Have the resources to fully manage another department.  

All-in-all, you want to ensure that you weigh out all options when choosing between in-house IT and outsourcing IT. Determine what your budget is, what resources you will need, and consider how much energy you have—be honest with yourself and manage your expectations. Then, make sure that any MSP you consider is qualified as well as insured. Do not shy away from asking questions and getting your answers. At the end of the day, you might decide you want both – which is called “co-managed IT,” and it is becoming much more common.  In this scenario, you can have the best of both worlds. 

At PalmTech, we know that each business has unique needs. Our team is always ready to carry out our core value of providing a white-glove service for all our client’s issues. If you think going with a managed service provider is the right decision for you, we want to answer any questions you have! Contact us at [email protected] or call us at 561-969-1616 

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About the Author: Chuck Poole, CISSP, CEO of PalmTech Computer Solutions
More than 40 years ago, Chuck Poole set his eyes on one of the first "Personal Computers" commercially available and it was love at first sight. He was so enamored with computers that some people worried he might never do anything else - and they were absolutely right. Learn More