Should you hire Internal IT Staff or Outsource to an External Service Provider
Most small business owners handle all aspects of their businesses, including acting as the information technology department. This will work for as long as you remain a small business without employees. When you grow and start hiring staff, will it make sense to use your business-building time on IT issues?
Unless you are an information technology service provider yourself, chances are your time will be much better spent marketing your products and/or services, establishing relationships with your clients, providing exceptional customer service and just otherwise growing your business.
How do you know when it's time to get IT help? If the information technology demands are affecting your day and negatively impacting your actual business related activities - it's definitely time to consider finding an IT resource. If you start adding new employees and computers, it's probably a good time to look into adding IT help, as well.
Should You Hire Internal IT Staff or Outsource?
When you make the decision to find an IT resource, your first decision will be whether you need to hire one or more staff to fulfill the role, or if you're going to outsource IT services. Having dedicated IT staff means they are 100% committed to your business. They're not splitting their time among numerous clients the way a contracted company might. One of the benefits of having an IT department is that the staff develops a strong understanding of your unique business needs and should be in a good position to manage your short and long term IT requirements. With your own IT staff on payroll, you know you've always got someone available (unless they're out sick or on vacation!) should an emergency or urgent situation present itself.
The primary disadvantage of hiring IT staff is that you'll be paying for their benefits, their training, and a variety of other costs associated with hiring a new employee. Not to mention, you have to pay them the agreed upon salary regardless of how much IT work you end up having, which means you may be overpaying based on workload!
There are a variety of advantages of outsourcing to an IT service provider over hiring staff. You can choose to outsource your information technology needs to a flat rate IT service provider and reduce your monthly and overall costs. Having a virtual IT department lets you focus more on running your business rather than the technology that supports it. You aren't stuck paying employee benefits or other employee costs, and you aren't responsible for making sure the IT team remains up to date with their training and knowledge.
The Bottom Line
Finding the right information technology help for a growing business needs is challenging. When you think strategically about your business' unique IT requirements, you can make sound decisions that further promote its growth and profitability.
IT Outsourcing Models
There is no doubt that IT Outsourcing is the obvious choice for most companies, as in-house IT staff are expensive, difficult to motivate and manage, and in many cases they don’t stay around for very long.
When it comes to IT Outsourcing, there are two main support models:
- Traditional IT Outsourcing is a lot like having your own in-house IT staff – except that they are not on your own payroll. Instead, you pay the IT Outsourcing company to provide a certain number of staff for a pre-determined number of hours per week or month. The benefit is that you have access to technical skills without having additional staff on your payroll – but the disadvantage is that you can end up paying more for that staff member than you would do if you hired your own in-house staff. Ultimately though, this model suffers from the same shortcomings as traditional break-fix IT Support, in that you are paying for technical resources, instead of paying for your network to be optimally maintained.
- Managed Services, on the other hand, is a different model of IT Outsourcing altogether. Instead of paying for the time of an IT employee, you are paying for your systems to be properly designed, maintained and supported – regardless of what the service provider has to do to achieve that. Ultimately, this is the end objective of any IT department. By choosing a managed services provider as your IT Outsourcing partner you can enjoy all the benefits of IT Outsourcing, but without the downside.
Put simply, Managed IT Services give you the best of both worlds – reliable IT systems and effective support – without having to find, employ and retain your own team of technical staff.
The table below summarises some of the key differences between in-house IT departments, traditional IT Outsourcing and Managed Services:
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In-house IT Staff
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Traditional Outsourced / Break-Fix IT Support
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ASG’s Managed Services
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| Overview |
Overview |
Overview |
| The customer takes on an internal staff member who is responsible for IT. Staff member is seldom equipped with proper network management tools due to extremely high costs.
Maintenance work is performed manually during office hours.
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An external company is paid to spend a certain number of hours per week/month on support. Any additional support is billed per hour.
After-hours work is billed at higher rates.
Proper network management tools are seldom deployed at the client’s premises due to prohibitive pricing.
Maintenance work performed manually during office hours.
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ASG is tasked with maintaining the network at a fixed monthly cost. There are no extra costs, so the customer can budget for IT support with accuracy.
ASG’s network management platform is used to automate the majority of tasks, thereby reducing the need for manual intervention.
Most maintenance tasks are performed out of office hours.
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| Pros |
Pros |
Pros |
| Perceived benefit of being able to manage own staff. Unfortunately, managing IT staff comes with its own set of challenges which often aren’t fully appreciated until it is too late. |
The interests of the IT support company are directly opposed to those of the customer, as the IT support company benefits from any additional IT support hours which the customer uses. Staff training, skills redundancy, etc. is the responsibility of the Service Provider.
Finding and retaining good IT staff is the responsibility of the Service Provider
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Financial risk lies with ASG. In the event of a system failure, ASG is responsible for recovering the failed system.
Fixed monthly cost for all-in support.
Comprehensive SLA with cash-back penalty for non-compliance and an opt-out clause for the customer in the case of non-compliance by ASG.
Staff training, skills redundancy, etc. is the responsibility of ASG.
Finding and retaining good IT staff is the responsibility of ASG.
Maintenance tasks (updates, anti-virus scans, disk cleanups, etc.) are performed out of work hours, without affecting productivity.
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| Cons |
Cons |
Cons |
| Financial risk lies with the customer.In the event of a system failure, the in-house technician is responsible for recovering it.
However, many times this requires deeper skills than the in-house staff possess and as a result an external consultant is called in, at hourly rates.
Best-effort by in-house staff.
No guarantee in terms of service levels.
Staff training, skills redundancy, etc. is the responsibility of the customer.
Finding and retaining IT staff is the responsibility of the customer.
Maintenance tasks (updates, anti-virus scans, disk cleanups, etc.) are performed during work hours; this has a significant impact on productivity.
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Financial risk lies solely with the customer.In the event of a system failure, the customer carries the cost of the recovery.
Any after-hours work is billed at overtime rates, increasing the financial risk carried by the customer.
Time-based billing results in highly unpredictable IT support costs.
Maintenance tasks (updates, anti-virus scans, disk cleanups, etc.) are performed during work hours; this has a significant impact on productivity
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Nothing! Managed services provides the client with a stable, secure IT infrastructure without the need to hire staff.
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