A Cost Analysis of In-House and Outsourced IT

As the largest companies across the world continue to outsource a growing number of jobs, businesses of all types and sizes find themselves asking whether they should follow suit. IT services are included in this debate, though many still question whether in-house or outsourced IT is the more cost-effective solution.

In most cases, the short answer is that it depends on the needs of the individual business, considering factors like size and industry. However, there is a range of factors that are applicable to companies of all shapes and sizes. Before making your decision, be sure to consider the question from every angle.

5 Factors to Consider When Choosing an IT Service

Ultimately, getting the most for your money when hiring IT services means finding an option that is perfectly matched to the size and scope of your business needs. Because of this, every company’s IT should look a little different. Even so, understanding some of the basic differences between in-house and outsourced IT services can lay a strong foundation for making the right choice.

Take a look at some of the most important factors to consider when deciding between in-house and outsourced IT.

Upfront Cost

While the actual cost differences between in-house and outsourced IT has been subject to debate, many business leaders agree that in-house IT services are going to put extra strain on your budget than their outsourced counterparts. Part of the reason for this has to do with the fact that salaried or hourly wage IT staff need to be paid even when they don’t have a specific service to perform, which can waste a lot of money over the long term. This is especially true for smaller businesses, which will need to pay employee benefits and other costs that are a greater burden to them than to a larger corporation.

On the other hand, outsourced service providers are generally only onsite when they are needed. This can drastically cut down on costs, even if the base rate of an outsourced IT professional is higher than an in-house one. Plus, since many IT companies serve a wide range of different clients, they are generally able to provide their services at an affordable rate.

Time Investment

No matter where you source your IT services, finding the right professional to suit your needs is going to require time and effort. For in-house service, this means interviewing candidates in an already competitive labor market. Unless you’re able to pay top-dollar, you may find yourself settling for a less than ideal match.

By contrast, there is much less pressure placed on outsourcing IT services. There is little risk to trying out one firm for a limited time and then switching to another if you aren’t satisfied with what they offer. Of course, you still need to devote some resources to seeking the right firm and overseeing their work, though in general, the time investment will be significantly less.

Skill and Expertise

There are skilled IT professionals all across the labor market, but how you hire their services affects their relationship to their work. One major advantage of in-house IT service is talent development. After a team has invested the time in learning your systems, they will have gained significant expertise in their field, as well as a familiarity with your networks, individual computers, and other technologies. While reaping these benefits takes time, many find the investment well worth the effort.

With outsourced IT, any on-the-job experience a given professional may gain is to the benefit of the IT firm. In some ways, this is a loss, though it’s worth remembering that IT firms are often able to attract the top talent in their field. After working with multiple companies and a range of different systems, their skill level and quality of work are often very high.

Access and Communication

One leading reason why some companies prefer in-house services is access. When you can simply walk down the hallway to resolve an issue with your computer systems or schedule a repair, the advantage of in-house service becomes clear. This is especially true in the case of emergencies when quick action can make a drastic impact on daily operations.

If such an emergency strikes while your outsourced IT team is working with another client, or tied up for some other reason, it may be hard to get immediate attention. Another factor to consider is that many outsourced IT techs don’t show up on-site at all, instead of working remotely through an internet connection. While this is perfectly fine for most kinds of maintenance and network issues, in some cases it may make it more difficult to resolve a problem.

Security

If your systems house confidential information, valuable intellectual properties, or other vulnerable data, it is worth considering the risks that come with hiring outside IT help. Perhaps the most surefire way to keep your data safe is to hire an in-house professional with whom you can build a lasting relationship over time.

However, it’s important to remember that much of this risk can be mitigated by choosing your IT service provider carefully. Established firms with a good reputation among previous clients are a safe bet when it comes to data security.

Which Comes Out on Top?

Ultimately, the in-house vs outsourced IT debate largely comes down to scale. Smaller and mid-sized businesses will generally find that outsourced IT is more cost-effective and convenient than an in-house alternative, simply because they don’t require round-the-clock network support the way larger companies do. It’s true that such outsourced services may not bring the same level of access and don’t allow a company to benefit from a team’s accumulated experience. However, as IT firms continue to refine their services, they are getting better at bridging these gaps with remote access technologies.

That being said, it’s important to keep in mind that the IT service that will be most cost-effective for your business depends on a wide variety of factors. Companies that need an extra level of cybersecurity, or are anticipating large growth in the near future may have different needs than an established mid-size business.

To get a better idea of how to best support your technology needs, speaking with an experienced team of IT professionals can be a great place to start. Network Coverage is dedicated to making IT services both profitable and productive for your business. Get in touch with our customer service team today to find out more.