IT outsourcing: what are the pros and cons? Trusting some or all of your IT support to an external provider offers financial benefits that may not always be obvious from a spreadsheet. They include:
- Eliminating the risk of IT debt
- Benefiting from efficiencies and features of up-to-date technology
- Instant access to specialized IT knowledge and talent
- Savings on costs related to in-house employees, including recruitment and training
- The ability to scale IT quickly
- A more agile organization
- An IT strategy that supports long-term business goals
There’s a lot to consider when it comes to IT budgeting, including whether and when it makes financial sense to outsource some or all of your IT operations. Each business is unique, so there’s no one-size-fits-all solution. But there are plenty of considerations to keep in mind, from staffing to your business goals.
The major downside to keeping IT in-house is that it may not be based on best practices for business growth or technology evolution. For small businesses, in particular, it might mean saving costs in the short term, but at the cost of accumulating IT debt: by choosing a limited solution now, it’s going to cost them more later to bring hardware and software up to the state it needs to be in to serve operations effectively.
Such businesses may also be missing out on savings and enhanced capabilities from efficiencies and features that up-to-date or more targeted IT solutions could provide. But without sufficient IT expertise in-house, leaders may not even know they’re missing out, or they may have an idea but no time to address the problem.
Developing an IT budget requires both effectively managing day-to-day needs and planning for long-term growth and requirements. A business should investigate what is working across its IT operations, what it needs help with or could do better, and where there might be some redundancy or overlapping among departments.
While it is possible to rely on in-house talent for these tasks, it is difficult to find IT professionals who have the broad expertise required to manage the full scope of IT operations and planning today. Outsourcing IT means you have access to professionals with skills in all different types of technology, and who are always learning new ones.
An all-in-one IT provider also saves the organization the time, costs, and effort to find and hire outside consultants each time there is a new challenge or need, helping the organization be more nimble. For example, there may be a sudden influx of new business, or it may need to scale quickly to stay competitive. An outsourced IT provider can quickly step in with expert resources—no need to spend valuable time on recruiting or training.
When it comes to growth, looking at the numbers may suggest that hiring more IT workers is less expensive than outsourcing. But those numbers only tell part of the story.
For example, suppose an IT provider charges $10,000 a month to provide helpdesk support for a company’s users. The company grows by 50% over time, increasing the monthly charge to $15,000.
As a result, the company considers hiring two helpdesk people at a $65,000 annual salary to save on those outsourcing costs. That’s a bit less than the yearly costs for outsourcing (assuming the company is offering limited or no benefits).
But consider: Who is going to step in when one of those two desk support employees is out sick, on vacation, or leaves the organization? Long waits for support can frustrate users and negatively impact a company’s brand reputation, leading to lost sales and reduced customer loyalty.
In addition, the company needs people to manage those employees and validate the decisions they make. That requires an IT director. It may also need an engineer to help manage the systems. Suddenly, the company’s IT costs have ballooned—and that might be money it could put toward other IT planning and features that could bring in a better ROI.
A knowledgeable IT provider can help your business figure out a budget that supports your current and future needs and also provides wiggle room for any unexpected events. At a holistic level, they should understand business as well as individual departmental goals and challenges, so they can craft a strategy that both works with your budget and furthers your progress toward growth and success.
Contact us if you’d like to discuss outsourcing some or all of your IT operations as a strategy for realizing your business’s full potential.
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