5 Advantages of Outsourced IT—and 5 Disadvantages

Nikita Virag
Tue, 01 Oct 2024 15:58:00 +0000
Technology, Hr, Staffing, Outsourcing, Information-technology, It

The IT department is pivotal in any business's growth and success. Having a robust IT framework not only fosters innovation, but also enhances productivity and efficiency. However, building an IT team can be a challenge. Many businesses, especially small and mid-sized enterprises, face the dilemma of having to choose whether to have an in-house IT department or outsource the IT tasks to a managed service provider (MSP).

In-house IT departments and MSPs each have their own advantages and disadvantages. Here are pros and cons for each option to help you decide which option aligns best with your business's growth and budget.

Advantages of an in-house IT department

An in-house IT team offers many benefits, including quicker turnaround time, more control, and familiarity.

Advantage #1: You can directly and quickly implement new processes

When it comes to implementing new changes to IT procedures or installing new systems, it's easier and quicker with in-house staff. All you will have to do is discuss the best options with your IT team and implement the process that best suits your business's needs and budget. In comparison, with an outsourced provider, you likely will have to go through an extended process that may take a lot of time.

Advantage #2: They already know your business

Every business is unique in terms of its IT needs and requirements. An in-house IT team is familiar with a company's ins and outs, and is in a better position to suggest IT solutions that cater to the business's needs and are within your budget. In contrast, most MSPs offer service packages. Even if you don't use many of the services in a package, you still have to pay for them.

Advantage #3: They take full responsibility for your data

In recent years, cyberattacks on businesses have increased manifold. Besides this, consumers have become more cautious about sharing their personal data and want to know how the business will handle, store, and secure their personal information. With an in-house IT team, you are in control of managing and securing your customers' data.

Drawbacks of in-house IT

Disadvantage #1 Costly to maintain in-house IT

Staffing an in-house IT team is costly compared to outsourcing IT. Besides the salaries of the IT professionals, you will have to consider additional factors like employee training, cybersecurity certification, IT infrastructure, and other employee perks.

Disadvantage #2 More challenging to scale in-house tech systems

With every new technological update, businesses need to upgrade their systems and processes to function seamlessly. With an in-house team, this means buying new hardware and software, configuring new systems, and hiring and training employees. And let's not forget about new cybersecurity measures and licensing requirements.

When you partner with an MSP, you can scale your IT by simply raising a request or making a phone call. Since MSPs have all the necessary infrastructure and professionals, they can upgrade their client's systems at a moment's notice.

Disadvantage #3 Too much work for a small staff

Managing in-house IT and tech processes comes with many responsibilities and challenges. And if the IT team is small, as in the case of most SMBs, this could mean less productivity and more system downtime.

Benefits of outsourced IT

Advantage #1: Less expensive

IT solutions and services companies generally offer you access to highly qualified IT professionals and a gamut of resources at a fraction of the cost required to set up an in-house team. Since MSPs handle multiple clients at once, they spread the cost of IT infrastructure and professionals amongst their clients. This allows them to offer their expertise and access to upgraded hardware at a discounted rate.

Advantage #2: Leaves businesses with more time to focus on running the business

Managing an internal IT team takes time and money. For SMBs with small staffs, having to manage day-to-day operations along with IT can take away from the primary task of expanding and growing the business.

Advantage #3: Greater opportunity to scale the business

Compared to in-house IT, MSP offers a small business more freedom and opportunity for scaling. An MSP partner can assist you with your expansion plans by helping you incorporate new IT systems and processes into the business.

Disadvantages of outsourced IT

Disadvantage #1: MSP will have access to sensitive data

Data security is a top concern for most business owners. One of the biggest drawbacks of working with an MSP is they have access to their clients' data. However, there are contracts that outline the rules for accessing clients' data, and there are penalties for violating the rules. Thus, before partnering with an MSP, you should thoroughly evaluate the company's credibility and find out how they will handle and manage sensitive data, and what measures will be put in place to safeguard it.

Disadvantage #2: Most MSPs offer a one-size-fits-all solution

A one-size-fits-all approach isn't effective when it comes to IT and technology. Thus, you shouldn't work with MSPs that cannot customize solutions as per your business requirements and needs. Ensure the service provider you choose to work with has the ability and resources to tailor unique solutions for your business while ensuring improved productivity.

FAQs on choosing between in-house or outsourced IT services

Is outsourcing or in-house IT cheaper?

Outsourcing IT services are often cheaper for smaller businesses or those with limited resources, as it eliminates the need for hiring and training IT personnel, purchasing expensive equipment and software licenses, and maintaining an IT infrastructure.

What is the primary disadvantage to outsourcing your IT services?

The primary disadvantage of outsourcing IT is the potential loss of control over the quality of work and the lack of communication with the outsourced team. Besides this, there is an increased risk to data security and confidentiality.

Why do some firms outsource their IT functions?

Most firms delegate their tasks to third-party IT companies to reduce or control operational costs, free up the internal team to focus on core competencies, and increase productivity. Outsourcing also allows businesses to be more agile and competitive in the market.

About the Author

Post by: Nikita Virag

Nikita Virag is a dedicated IT professional. She has a decade of experience as a strategic marketer focused on sales and revenue generation.

Company: Enurance IT Services
Website: www.endurance-it.com