Many organizations simply compare an employee’s salary to the monthly or hourly fee of an outsourced managed IT company. However, they fail to consider all of the factors that determine whether an outsourced or in-house solution is the right choice. Here is everything you need to keep in mind when you’re making cost comparisons and calculating the ROI of each option.
The first consideration when choosing between outsourced managed IT and in-house IT employees is the monetary cost. The obvious difference is the staff salary versus the rate that you’re paying a managed services provider. However, the salary only tells part of this story.
The employee’s benefits also factor into how much they cost your company. Consider health insurance, retirement fund matching, training, travel, and other expenses that they incur as part of their jobs. You may find that you end up with an amount that is just as much as the base salary.
You probably know how to look at the monetary costs by now, but the hidden costs are more challenging to quantify. However, they’re an important part of making the best decision on going in-house or working with a managed services provider for your IT needs.
Consider the landscape for hiring IT professionals. Every company using modern technology depends on IT staff to keep everything up and running. In specialties such as database administration, cybersecurity and big data, the demand exceeds the supply in many areas.
You need to know who and how to hire in these situations. If you don’t, you end up in a situation where you have employees that don’t fulfill your ongoing IT needs. The culture fit could be off or their technical skills were not actually what you required. Effectively recruiting technical professionals requires a special skill set that includes evaluating their abilities to determine whether they can do the job they’re signing up for.
Another hidden cost is whether you have the resources in place to train your new hire on the systems that you use in your organization. While they bring their technical skills with them, they still need to get brought up to speed on your practices and procedures.
If you need to grow their skills to fill gaps, you also need to consider the costs of workshops, certifications and degrees. Without a clear upward path for advancement in their career, your IT employees may become disengaged with the position and create turnover.
Some applications and platforms charge you on a per-user basis. When you add new employees to these systems, you also increase the cost that you’re paying monthly for the tools that they need to do their jobs. While this expense doesn’t play as big of a role as other costs, it’s something to keep in mind to get a complete picture.
A managed services provider, on the other hand, eliminates a lot of these hidden costs. You still want a strong training program in place to acclimate them with your particular system, but you won’t need to spend anything on their certifications or ongoing training. The provider handles all of that themselves.
Opportunity costs also play a factor in this decision. You need a lot of IT support to stay competitive in today’s business world. For the price of one salaried employee, you can hire a full outsourced IT team of experts. Having that many people available to address your current and future IT needs can be the boost that your company needs to expand its business and attain healthy growth rates.
You also get an outside perspective from IT support services, as they deal with a variety of clients both in and out of your industry. They have hands-on experience working with companies like yours and seeing the challenges present in your market. Even if they haven’t encountered your exact project type with their other work, they have a broad range of skills that make it possible to adapt tried and tested solutions for your needs.
Many companies have concerns about data breaches, as hackers look for ways to steal valuable data. If you only have one or two people doing all of your IT in-house, then your security measures are probably lacking. A fast response is necessary to minimize the harm inflicted if someone breaks into your systems. An IT company helps support you before, during and after a potential attack.
Another downside of in-house IT teams is the vacation schedule. If a critical team member has a planned trip in the middle of a big project, everything comes to a halt while they’re gone. An IT services provider can simply plan around their technician schedules and swap in someone else when it’s necessary.
In-house and outsourced IT teams each have their place. The right choice often ends up being a combination of these two resources. When you need to decide whether to hire another full-time IT employee or go with outsourced IT services, use these costs to discover the true ROI of each option.