Pros and Cons of IT Outsourcing: Is it Right for Your Business?
Growing businesses are often challenged with questions such as, “Should I switch from in-house to an outsourced IT provider? Is this the right decision for us? What are the pros and cons of IT outsourcing?”
If your business is looking to invest in a managed service provider (MSP), you should consider the benefit your business will receive from outsourced IT as a whole, as well as from the specific provider you’re considering. This article will guide you through the advantages and disadvantages of outsourcing your company’s IT so you can decide if managed IT services are right for your business.
Pros of managed IT services
IT outsourcing knowledge and resources
If your business relies upon one or a few in-house IT professionals, you’re likely restricted to the knowledge and schedules of those few individuals. When you outsource your IT to a viable provider, your company will benefit from the expertise and availability of a team of professionals who are receiving continuous training and information regarding the latest IT solutions. In addition, your organization will benefit from the IT consulting capabilities of a CIO or professional service engineer dedicated to helping your company achieve its business goals.
Innovative technology insights help your business stay ahead of the curve. Hardware and software are rapidly changing and it can be difficult to keep up with the latest developments in the industry. Outsourced IT providers generally have relationships with vendors that will provide your business with the technology you need, sometimes at a lower cost than you would have paid on your own.
Outsourced IT providers will likely make the best security recommendations for your business because they know what new technology is available and have experience integrating advanced tools into clients’ systems. Also, an in-house IT department is usually unable to monitor your company’s network day and night for threats and issues.
Most IT providers offer 24/7/365 remote monitoring services to ensure your network remains secure even when you’re not working. Continuous monitoring is necessary if you want to reduce the downtime your employees experience and increase productivity across the organization.
You can’t guarantee an outage won’t occur. An outsourced IT provider will have the team and resources you need to help your business prepare for and effectively respond to an IT emergency. If your business relies upon an in-house person, they are likely limited to the knowledge and experience of a few techs and will have fewer resources and less manpower to resolve critical issues in the minimum amount of time. This can result in hours of downtime or potential data loss if the issue is not handled correctly. Your business can be subject not only to repair costs, but to the legal and financial penalties that can result from such incidents, potentially damaging current and future client relationships.
Predictable cost and billing
IT outsourcing is a predictable cost as long as you have a relationship in place where your business is billed by the user, or another consistent factor. While in-house may seem predictable, your business will still have to handle and pay for turnover, vacations, sick-leave, etc.
In addition, in-house IT staff are usually busy reacting to issues and have little time to develop preventive solutions and network improvements. The outsourced IT provider is likely more capable of determining what your business needs so you don’t make the mistake of investing in unnecessary technology.
IT Outsourcing CAN reduce business costs
Invest in IT outsourcing to reduce control and operating costs that accompany the management and oversight of IT employees. Training, health insurance, employment taxes, etc. associated with hiring an on-site IT person can become expensive for a business looking to minimize IT expenses.
It’s important to invest in your company’s IT department, but be strategic about your investment. Select an outsourced IT provider based on their ability to provide the IT consulting, planning, and implementation necessary to align your technology with your business goals. This may appear to cost more that in-house IT at the start, but the standards of the IT provider and improvements suggested for your IT environment will likely enhance your company’s productivity and employee morale while reducing downtime and IT frustration.
Focus on your core competencies
It’s common for businesses to have one person wearing multiple hats within the company, one of which being IT. This can make it difficult for the individual(s) to focus on their designated role and can negatively affect the company and employee. By outsourcing your company’s IT needs, employees will be free to spend more time focusing on what makes their business unique.
Cons of managed IT services
IT outsourcing CAN be more expensive
For some companies, outsourcing their IT can be more expensive than hosting the solution in-house. If your business is using outdated equipment, dozens of firewalls, differing software, etc. a reliable IT services provider will require you to upgrade and purchase new hardware and software to meet their service standards.
A provider cannot effectively manage 25 different firewalls and deliver the service levels promised. At the start, a makeover of this caliber can be costly as your business will be required to invest in new technology and equipment. However, the long-term benefits the transition facilitates can boost the productivity and efficiency of your organization, paving the way for future growth and success.
Potentially disappointing service
Outsourcing your IT doesn’t guarantee your business will receive adequate service levels and results. There are thousands of IT service providers in the marketplace and many of them may be unable to serve your business effectively.
Before signing a contract, make sure the IT provider’s service level agreement (SLA) establishes a clear response and resolution time that they’re required to maintain throughout the duration of their contract with your business. Ensure you not only understand the contract before you sign, but ask the provider’s current and former clients about their experience. Essentially, do your research, and be sure you understand what services you are receiving and how/when they will be delivered.
Your IT guy isn’t across the hall
Businesses are often reluctant to switch from an in-house solution because they’re accustomed to having their IT person right down the hall. However, the comfort of an on-site IT person can be misleading. Although it may be more convenient to use an in-house solution, it’s not always more effective.
An established outsourced IT provider will likely employ a ticketing system that will triage issues based on their urgency. It can be frustrating for staff to adjust to waiting for their issues to be resolved, but the IT service provider’s SLA should outline expected response and resolution times to ensure your employees are not being delayed by poor or slow service. Essentially, a structured ticketing process is a sign of a more mature IT provider and once a company’s members acclimate to the change, the process can be beneficial in helping prioritize and resolve IT issues.
In addition, today’s technology has become so sophisticated that providers can remotely deliver the same level of service as an on-site technician. If your business’s IT issue is classified as a priority in your provider’s outsourcing agreement, you could have someone working on your issue in a matter of minutes.
One of the most common objections we hear when a company is looking to outsource their IT is, “I don’t feel comfortable letting someone else handle my network and data.” This concern is valid. If a business engages with an IT services provider that has a lower OML or does not have certified, experienced professionals on staff, they are more likely to endure data loss, network downtime, or other IT issues as a result.
When selecting an IT services provider, ask to review their incident and change management controls to ensure the provider’s processes align with IT best practices. It’s important that your business is 100% comfortable with the knowledge, skills, and resources of the outsourced IT provider you choose.
Today’s business is almost entirely dependent on technology and your organization cannot be successful without a dependable and secure IT environment to support your processes and needs. At Aldridge, we will work to understand your business and develop solutions that will promote growth and success. Contact a firm representative today to find out more about what we can do for your business.