When Should You Outsource IT Instead of Keeping it In House?
Keeping IT in house and outsourcing IT to a service provider both require your team to make an investment of time, money, and strategic thinking to varying degrees. You want to make the right choice for your business: one that will deliver consistent, high-quality results that drive your company forward and help you manage your IT spend.
IT outsourcing is a great option for small businesses, startups, and organizations that aren’t centered around software development but need additional technical support to manage their digital work environments. Many companies go with a hybrid approach, outsourcing select IT tasks to reduce costs and labor or bringing on an IT service provider to get extra hands on deck when it comes to scaling or special projects.
Choosing the best option really comes down to understanding your business needs today, considering your roadmap for the future, and finding an IT service provider that can match or exceed the collaboration and quality you’d expect from an in-house team.
In this article we’ll talk about the pros and cons of in-house IT vs. outsourcing and walk you through some of the business benefits of IT outsourcing so that you can make an informed decision for your team.
Comparing the Benefits of In-House IT and IT Outsourcing
In-House IT Advantages
In-house IT teams are fully integrated with your business. Their priorities and processes align with the organization’s overarching structure. They can easily collaborate with other teams and be on-call on your timeline. You can get granular oversight into what the IT team is up to and have control over third-party software or platforms they use to create systems tailored to your operations.
In-House IT Challenges
Keeping IT in-house requires you to hire, train, manage, and scale an internal team. This means you need to factor salaries, benefits, bonuses, and other employee-related costs into your IT budget. Great talent isn’t always easy to come by: 57% of IT leaders say it’s difficult to hire for the skills they need on their team. You also have to dedicate management resources and create structures and processes from the ground up. It’s not easy to expand teams rapidly when you want to scale.
IT Outsourcing Advantages
IT service providers bring a ready-made team of vetted specialists with experience supporting many businesses similar to yours. They can offer you curated software options that will fit your business. You can call on an IT service provider when it’s time to scale and say goodbye when the project is done. You can also get ongoing outsourced IT support to expand your team’s capacity so they can focus on business-critical tasks. The recurring cost of working with an IT service provider is more predictable and cheaper than maintaining your own team.
IT Outsourcing Challenges
Generally, IT service providers work with specific software vendors which means you don’t have as much control over which solutions they’re using. Since you’ll be sharing or exposing data to your IT service provider, it’s critical to ensure that they have robust privacy and security protocols in place to protect sensitive and proprietary information. Many providers can offer 27/7 support, but you’ll still need to establish clear lines of communication and determine how responsive the provider will be in the event of an emergency. You’ll also need to set up an IT documentation process to make sure that you can retain any knowledge the IT services team has that’s relevant to your business.
The challenges of IT outsourcing will depend on the vendor you choose. A great outsourced IT support provider will be able to address your unique business needs and collaborate with you to achieve your goals. It’s important to select an IT services provider that works to get ahead of any challenges you’re likely to face.
Taking a Hybrid Approach to IT Outsourcing
One of the benefits of IT outsourcing is that it’s not all or nothing: you can keep core IT functions in-house and outsource time-consuming manual tasks or loop in an IT services provider to offer expert input when you need it.
The average IT worker only has the capacity to resolve 85% of the tickets they receive. They’re also stretched thin, covering additional tasks that are out of their typical scope of work, such as addressing cybersecurity issues. Fifty-eight percent say that they feel overwhelmed by the work they have on their plates. Calling on an IT outsourcing provider that offers managed services can take the pressure off of your team so they can focus on core priorities. Leveraging IT professional services enables your team to adopt new technology quickly. With a hybrid approach, your internal IT team can operate more efficiently and scale to meet the changing needs of the business.
How to Choose Between In-House IT vs. Outsourcing vs. Hybrid
According to Deloitte, 77% of companies outsource IT infrastructure services and cybersecurity. Only 34% of companies cite cost savings as the main reason for outsourcing. Instead, leaders outsource to get better access to specialized talent and value-added capabilities that can help them achieve business outcomes.
When you’re deciding whether to keep IT in house, outsource to an IT services provider, or adopt a hybrid approach, you need to identify your top priorities. There are a few factors you should consider during your decision-making process:
Evaluate the total cost of ownership for all three options, including salaries and infrastructure for your in-house team.
Determine how much control you need to have over your IT processes at this stage in your business, or whether you should prioritize reducing the burden on your team.
Consider whether you have the technical expertise on your team to achieve your current goals and whether you’ll need to increase your technical expertise to tackle projects in the near future.
Think about whether managing IT reduces the resources you can allocate to your main business objectives.
Assess whether you have the capacity to scale and stay agile to meet evolving demands with your team, or if you need to expand your capacity quickly.
Here’s an at-a-glance breakdown of the obstacles and outcomes that each option can provide.
| Objective | In-House IT | IT Outsourcing | Hybrid |
|---|---|---|---|
| Control Over Projects and Tools | High: Direct team oversight and management. | Moderate: Vendors bring their own tools and processes; requires clear communication. | High: Internal and external teams collaborate on solutions that fit the business. |
| Access to Specialized Talent | Low to Moderate: Attracting and retaining talent is resource-intensive. | High: Top talent gives IT service providers a competitive edge, so they've already invested in high-performers. | High: Combine top internal talent with proven specialist teams. |
| Access to Specialized Capabilities | Moderate: Upskilling teams and adopting new software solutions is time-consuming. | High: IT service providers provide the capabilities you need out of the box—no onboarding or training required. | High: Internal IT teams can learn from service providers and adopt new technology faster with the provider's support. |
| Internal Knowledge Development | High: Team members learn new skills and gain a deep understanding of the business. | Low to Moderate: Internal teams might not be exposed to outsourced IT tasks; requires excellent documentation from the IT service provider. | Moderate to High: Requires clear communication and a commitment to documentation. |
| Cost Reduction | Low: Maintaining an internal IT team is expensive. | High: IT service providers have predictable recurring costs that are more cost-effective than salaries and benefits. | Moderate to High: Invest in a core IT team and increase efficiency with IT service providers to lower total costs. |
| Scalability | Low: Challenging to hire and develop and adopt new systems rapidly. | High: IT service provider's team can offer new services and solutions when needed. | High: IT service provider's team can augment internal capacity and capabilities any time. |
| Security and Privacy | High: Data doesn't leave the organization. | Low to High: Data must be shared outside the organization; requires strict security protocols and access controls. | Moderate to High: Internal team can provide more oversight into security and privacy measures when data is shared. |
Get Support Selecting the Right Outsourced IT Support Solution
IX Solutions offers managed and professional IT services. We partner with you to deliver support that’s tailored to your business processes and technology requirements. If you need some strategic guidance around IT outsourcing, our team can provide insights and advice that address your unique goals so that you can make the right choice for your business.