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IT outsourcing vs. In-house IT: Which is right for your business?

  • By Sanchanashree R
  • September 21, 2023
  • 700 Views

In the contemporary digital landscape, technology has become the backbone of nearly every business operation. To seamlessly integrate technology into their workflows, companies must rely on adept IT professionals capable of implementing, managing, deploying, and safeguarding IT systems.

Based on data from Gartner, Inc., it’s projected that worldwide IT expenditures will rise to $4.6 trillion in 2023, reflecting a 5.5% growth compared to 2022. This highlights the critical importance of IT services in driving business success. However, the choice between establishing an internal IT support team or opting for IT support outsourcing is a complex decision.

IT outsourcing vs In-house IT

In this blog, we’ll delve into the pros and cons of maintaining an internal IT department versus partnering with a managed IT services company.

Advantages of In-House IT:

Setting up an in-house IT team offers numerous advantages, each deserving of individual consideration.

In-depth business insight: One significant benefit of assembling an in-house IT support team is their profound understanding of your business operations and ultimate objectives. This familiarity empowers them to work diligently towards achieving these goals.

Direct oversight: The presence of an internal IT support team grants you complete control over their actions. This level of control enables consistent monitoring and allows for timely adjustments to align with your objectives.

Rapid response: During crises or urgent situations, an in-house team can promptly address challenges. Your direct control over this team enables effective guidance, minimizing downtime and potential losses.

While in-house IT teams offer clear benefits, they also present certain challenges.

Disadvantages of In-House IT

The cost factor: Establishing an in-house IT support team can be financially burdensome. Expenses include salaries, workspace setup, and necessary equipment. Additionally, allocating a budget for certifications and continuous training to keep the team updated on the latest technologies is essential.

Enhancing technical expertise: The dynamic nature of technology necessitates continuous learning. To maintain efficiency aligned with technological advancements, significant investments in various certification programs and webinars for your in-house team are necessary.

Did you know? Large companies in the US spent an average of $1,689 per learner in 2022, compared to $722 per learner in 2022. That equates to a 134 percent increase. – source

Limited availability: In-house IT teams, as your own employees, adhere to regulated working hours, including leaves and time off. Consequently, their availability for support is restricted.

Resource constraints: Budget constraints and workspace limitations may prevent you from hiring a substantial number of employees. Consequently, the number of in-house resources will be limited, potentially causing disruptions when experts are unavailable.

Advantages of outsourcing IT

IT outsourcing vs In house IT

Engaging an IT-managed services company for part or all of your IT support team offers numerous advantages.

Access to expertise: Outsourcing provides access to a diverse team of experts in specific fields. This alleviates concerns about business growth, as the team’s IT support aligns with your business objectives.

24/7 Availability: Depending on your contract, outsourced IT support can be available whenever needed. Managed IT services companies can swiftly replace unavailable resources, eliminating the burden of candidate hiring.

Enhanced service quality: Managed IT services companies employ professionals with up-to-date knowledge and positive mindsets, ensuring high service quality.

Cost efficiency: Outsourcing involves fixed costs that often prove more economical than the expenses of in-house employees, including training, workspace, benefits, and leave allowances.

Did you know? Roughly 59% of businesses in the United States are happy with outsourcing work because it saves money and is an effective cost-cutting tool.  – Source

Enable more business growth: Outsourcing IT burdens enables your internal staff to focus on delivering innovative solutions to drive business growth.

Disadvantages of Outsourcing IT

While outsourcing IT support yields substantial savings, it also presents minor drawbacks.

Less control: Monitoring external teams can be challenging due to remote work setups. Regular meetings and clear communication can mitigate this issue, ensuring their actions align with your goals.

Communication barriers: Remote teams may pose challenges in terms of in-person communication, potentially hindering understanding and rapport-building. Nonetheless, proactive communication and clear expectations can mitigate this concern.

Some fascinating facts about outsourcing

  • Roughly 4.5% of American jobs are outsourced each year.
  • Information technology departments are the most typically outsourced department in the United States.
  • A study by Gartner the worldwide IT spending is projected to total $4.5 trillion in 2023, an increase of 2.4% from 2022, –source

Which is right for your business? In-house IT team or IT outsourcing? 

The decision is entirely at your discretion. However, findings from a recent survey conducted by the Aberdeen Group indicate that 72% of enterprises benefiting from IT service outsourcing experience cost reductions of at least 10%. Similarly, the study reveals that 67% of these businesses observe enhanced IT service levels. In summary, while maintaining an in-house IT team provides tighter control, IT outsourcing undeniably presents opportunities for cost and time savings, contributing to the journey towards business success.