An Honest Cost Comparison: Hiring an Internal IT Department vs. Outsourcing IT Services
Businesses All Over the World Are Focused on Reserving Cash Flow Right Now… So What’s the Best, Most Cost-Efficient Way to Manage Your Information Technology? Let’s Find Out…
As the coronavirus pandemic subsides, many businesses will be reopening their doors, and while doing so, aiming to reserve cash flow as they get back to normal - or at least, their new normal. Many businesses will continue to embrace remote work as a way of controlling costs while keeping employees productive throughout the day. But what is the best, most cost-efficient way to manage your information technology? Should you hire an internal IT person or department? Or should you outsource to an MSP?
First and Foremost, It’s Important to Consider the Value of Both Options…
Naturally, any investment should be considered in terms of value brought to the business. For some, the cost of hiring an internal person is well worth the price because they’re able to rest assured knowing that person will become an integral part of the business. They’re available day-in-and-day-out to gain an understanding of your environment and your people while maintaining your information technology.
On the other hand, a managed service provider can be a valuable choice for businesses that need the convenience of having access to an entire team of qualified professionals. This makes sense for those who are willing to put the time and effort into finding an MSP that will build a close, long-term relationship that’s quite similar to hiring an internal person or department.
A Look at the Cost of Hiring an Internal Person or Department…
If you’re drawn to the value of hiring an internal person or department, it’s important to understand the cost of this decision. Here’s a look at the expenses associated with hiring an internal person or department:
- Health insurance
- Vacation time
- Sick days
- Training and development
These expenses can add up rather quickly, and unfortunately, you risk experiencing turnover that can be costly in terms of rehiring and training another individual. You must also consider that very few technology specialists will be experts in everything. Your salaried employee may not be proficient in the technologies you use in the future - meaning you will need to consider expenses associated with:
- Developing their skills via certifications and/or training in the technologies you’re migrating to/leveraging in the future.
- Obtaining further assistance in the form of hiring an additional person or taking advantage of co-managed services from an MSP.
You’re looking at around $50,000 - $100,000 at a minimum, per year, for each internal person hired.
A Look at the Cost of Outsourcing to an MSP…
First and foremost, let’s review what an MSP does. Essentially, an MSP is an entire team of technology professionals who take responsibility for the ongoing monitoring, management, and maintenance of your information technology. You pay a flat-rate monthly fee for a range of services, such as:
- Remote monitoring
- Ongoing maintenance
- Data backups
- Help desk support
- And much more
They have an entire team - meaning you can always count on availability and expertise, regardless of the technologies used. As a general rule, you can estimate anywhere between $125 per user per month to $300 per user, per month. On the lower end, plans will include the basics like monitoring, maintenance, and support. On the higher end, plans will encompass more complex requirements like the cloud or business continuity.
What makes this option cost-efficient above and beyond price? Naturally, the price is lower - but you’re also benefiting from:
- Support when you need it most: As opposed to hiring internally wherein you’re stuck without support when they’re on vacation or after hours, an MSP can provide support around the clock as needed.
- Various skill-sets and areas of expertise: An MSP has an entire team with varying skill-sets and areas of expertise. Many hire to ensure they have skills in all areas of technology.
- More organized processes and procedures: Typically, MSPs that have been in business for a while have more organized, well-documented processes and procedures - from onboarding to backups and everything in between.
All in all, it’s up to you which option you find the most value in. Many businesses do find they save money and operate more efficiently after switching from an internal person or department to an experienced MSP that knows what they’re doing.