THE REAL COST OF OUTSOURCING IT SERVICES AND SUPPORT
Trying to find information on the true cost of outsourcing IT services might seem difficult to some. But that is only because there really isn’t a standard across-the-board cost that works for every company. Different organizations have different needs but most businesses are intrigued by the idea of saving money. This especially true if it means making their business more efficient. In some cases, that can be accomplished by outsourcing IT services to a Managed Service Provider (MSP). For others, it means they get access to strategic technology expertise they would not otherwise have access to. And sometimes, it is simply because their internal IT team is overwhelmed and needs some supplemental help.
WHAT IS OUTSOURCED IT?
Outsourced IT is the practice of outsourcing some or all your business technology needs to a third-party expert, commonly called a Managed Service Provider, IT Services Provider or IT Consultant.
The types of service packages you can get from a provider can vary greatly, from ad hoc hourly support when you need it, to monthly recurring service contracts that provide everything from soup to nuts when it comes to IT support.
OUTSOURCED IT VS CO-MANAGED IT
There are two main ways to outsource your IT needs and each of them offers a different level of service at a different price point. One of which is called Fully Outsourced It and another that is referred to as Co-Managed IT.
Fully Outsourced IT – No on-site IT employees. Troubleshooting, security monitoring, backups, updates, and more are provided by the MSP. Servers may be stored and managed by the MSP at an off-site data center. The MSP should be considered your strategic technology partner.
Co-Managed IT – A business that has an existing in-house IT team but is looking for help. This could include offloading routine computing system work such as updates, backups, security monitoring and even help desk to increase bandwidth. Or reversed, where the in-house IT staff take care of the day-to-day operations but needs specialized expertise not available in-house.
What often happens is small to medium-sized businesses decide to fully outsource their IT needs. By fully outsourcing their IT needs, they reduce costs and end up with access to a wider selection of expertise. These expertise come from experts who work with similar companies week in and week out.
Bigger companies sometimes switch to a co-managed IT style of operations for the following reasons. One of which has to do with supplementing the needs of their internal IT department. This allows them to focus on their core priorities. The outsourced talent can provide aid in areas outside of the in-house IT staff’s normal scope of work. Most of the time this is done without the delay that comes with training and investment costs.
Let’s take a deeper look at various options for providing IT support to your business. Along with the real cost of outsourcing IT services.
Option 1: Keep Your IT Team In-House
It’s not hard to see why businesses tend to think having an in-house IT team is the best option for their IT needs. The appeal of having someone always available in the office seems great. After all, we need someone to assist with employee’s device needs and keep passwords up to date don’t we? Well not really, and this method will usually result in some serious costs, especially depending on where your business is located.
According to Salary.com average desktop technician receives an average salary north of $50,000 per year. The primary role of this entry-level IT employee is to update and maintain hardware and software while handling small troubleshooting issues.
IT managers are paid anywhere from $80-130,000 per year to take responsibility for core business IT systems and ensure that they are aligned with the business strategy. These employees are supposed to handle high-level tasks. They also ensure that the organization’s IT infrastructure is prepared for future growth and industry standards.
The common dilemma for most organizations is that they usually can only afford to hire one IT manager to handle the entirety of their IT operations. You are not getting the best return on your investment if you are allocating desktop technician-level troubleshooting tasks on a day-to-day basis to your IT managers. On the flip side if you are overwhelming your only technician with responsibilities and or duties they aren’t experienced enough to handle, you are going to have issues.
Pros: IT staff visible and easily accessed (at least during office hours) and are intimately familiar with the IT network layout and existing applications.
Cons: High overhead costs. Usually understaffed for the number of employees. Higher-level technicians are unable to concentrate on business strategy and are bogged down by day-to-day troubleshooting. If there is a sole IT manager, sick days and holidays can present a big problem. The cost of outsourcing IT services might even be lower than what you’re paying an in-house team
Option 2: Outsource Your Entire IT Department
When some people see the words “outsourced IT,” “remote help desk,” or “cloud computing” they get nervous. Some think that the cost of outsourcing IT services will be far too high. After all, isn’t it always best to have the IT guy stand behind you at your desk to fix that computer glitch?
The answer, for most of the fundamental IT issues you can think of is NO.
The benefits of outsourced IT can be huge! Most common problems such as a broken printer, slow computer, or forgotten password can be easily taken care of in minutes by an MSP. These rudimentary issues don’t need an on-site IT staff present in order to be resolved. You can save time and money by having remote technicians respond as soon as the problem arises. You can pick up the phone and get in contact with a help desk technician no matter where you are at any time, and for any reason!
Outsourced doesn’t mean you will have zero on-site support either, occasionally you will want or need on-site support. This can easily be arranged through your MSP. Whether you need weekly support, an occasional visit for a special project, or when there is an issue that simply can’t be fixed remotely.
The number one reason businesses move to outsourced IT is the need for greater technical expertise. It’s almost impossible to get the broad range of expertise you need in order to stay competitive in-house. Especially when it’s not cost-effective to build and manage it yourself in the first place. That’s where Managed IT Services can really help, letting you take advantage of economies of scale that only an MSP can offer.
Pros: 24 hr access to, a team of experts, network monitoring, and support with no sick days or holidays. Reduced risk due to higher IT staff volume. Faster resolution times than overworked in-house IT teams. Can have large cost savings, especially for small-to-mid-sized businesses.
Cons: You need to choose an MSP who offers superior communication processes and customer service. Limited or patchy communication leads to frustration and ultimately overall dissatisfaction with the service.
Option 3: Co-Managed IT
Combining an internal IT manager and an outsourced IT service provider gives you the power to harness the pros associated with having each, ultimately giving an organization the best of both worlds. This is the reason the majority of large organizations have begun switching to this model.
Co-managed IT can free up your IT team to let them refocus on your top priorities. Priorities such as creating strategies that empower your employees to be more productive, and assuring systems are aligned with company goals. IT leaders should be exploring ways technology can be leveraged to enhance productivity and profitability. However, this is difficult to do when your team is bogged down with routine maintenance.
Asking IT managers to handle lower-level IT tasks doesn’t contribute to job satisfaction. This also leads to overall office frustration because your employees can’t work around broken technology while they wait on the office IT guy to come around! Having experienced IT managers to guide your organization into a stable IT environment for the future is great. What’s even better is also having dozens of help desk technicians available all day, every day leads to a productive and successful IT department for any size business.
Pros: Organizations get the satisfaction that comes from getting to experience the best of both worlds. Increases productivity of internal teams. Outsource the tasks you don’t want to do in-house and keep control and direction over your environment. Or take advantage of expertise you don’t have to help you with strategic initiatives.
Cons: Most smaller organizations can’t afford to maintain in-house resources and cover the cost of outsourced IT services.
COSTS OF OUTSOURCING IT SUPPORT AND IT’S BENEFITS
What Does the Average In-House IT Team Cost?
At a minimum, your organization of 10+ employees will require one upper-level help desk technician to handle day-to-day troubleshooting. As well as, one IT manager to handle larger administrative issues and business processes. If we take the average salaries, this comes out to roughly $150,000 per year. This is in addition to PTO, insurance, and other overhead costs for a team of two to fully operate and maintain an SMB’s IT infrastructure. This number goes up as you continue to grow your business. Two people won’t be able to keep up with an office of 40 employees in the long term. Another Tier 1 help desk technician will be needed, and all overhead will go up. These averages don’t include necessary continued training expenses for the IT employees. It also doesn’t cover internal hardware replacement expenses, and emergency funds for any immediate IT needs.
What is The Real Cost of Outsourcing IT Support?
There are many questions that people ask IT service providers, but questions surrounding the cost of outsourcing IT services are at the top! This cost is not easy to estimate because every organization has a separate set of needs. In general, most organizations decide to start with a basic service package. Something along the lines of help desk, remote monitoring, updates, procurement, server management software, etc, and then scale up from there. Others may have more complex needs, including managed cybersecurity, cloud hosting requirements, and dozens of other technical requirem+ents.
A respectable IT service provider will work with your organization’s vision and current IT infrastructure to give you a competitive advantage. They should provide the best possible service at the best possible price. If you’re a larger organization, the combination of an in-house IT manager with an MSP may be just the ticket to propel your business to greater heights and reduce the cost of outsourcing IT services.
If you’re interested in learning more, worried about your current team struggling to keep up with your thriving business, or wanting to see how you can balance operating costs with future growth. Contact us or click the link below to learn more about what outsourced IT can do for you!