The primary basis of outsourcing or insourcing your Managed IT is economic. This decision should consider the direct costs of the position, as well as the impact of not having a stable resource.
First, let us discuss the cost of internal staffing for the four types of positions defined above. For purposes of creating an example decision process, I have provided the table of costs below.
Each marketplace and company may have different hiring capabilities and therefore have different costs, but these are reasonable costs to expect.
|Position||Salary Range||Burden||Burdened Cost|
|CIO||$ 125,000||$ 175,000||20%||$ 150,000||$ 210,000|
|IT Director||$ 90,000||$ 150,000||20%||$ 108,000||$ 180,000|
|Network Administrator\ Systems Engineer||$ 60,000||$ 75,000||20%||$ 72,000||$ 90,000|
|Front Line Support Engineer||$ 45,000||$ 65,000||20%||$ 54,000||$ 78,000|
In a smaller company (say less than 100 employees that use computers), the amount of activity that requires CIO skills is very small (but still very important). As such, even if you have the budget for this salary you probably will not keep a highly qualified person engaged enough to keep them happy.
Similarly, an IT Director activity level in the smaller company is most definitely not a full time function but also still very important when you need those skills.
When it comes to the Network Administrator and/or Systems Engineer, the amount of activity for the smaller company is in direct proportion to a combination of the complexity of the server infrastructure and the quality of the systems management best practices employed. The more you have mission critical applications hosted in the cloud by a 3rd party vendor the less complex your internal systems become…so the need can vary from one company to the next.
In our experience, if the internal systems are professionally managed for companies with under 100 users then you will experience significant periods of time where the systems engineer / network administrators have very little to do. Other times when maintenance, hardware refresh projects, new technology rollout projects, etc., activity spike you will need multiple systems engineers available. So, no matter how many of people with these skill sets you employ there will be times where you are over staffed and other times you are under staffed.
In smaller companies, key people tend to “wear a lot of hats”. Many times, we see management try to hire a single person to cover multiple rolls. Usually this does not turn out well. The reason for the wrong end result is you simply cannot find someone who has the ability and experience to think strategically (CIO), tactically (IT Director), and master the system engineer knowledge all while performing the daily grind of the front line end user help desk. This simply requires gathering to much knowledge and having too many aptitudes in a single person (or in two people).
Typically, you need at least three of the four positions staffed by different people for them to be effective in their job. Since most companies of this smaller size will never justify a $200,000 or higher budget for IT personnel they are left with one of two choices: insourcing your managed IT staff inadequately or outsource. From a cost effectiveness standpoint a full or partial (hybrid) outsource model is the only one that really makes economic sense.
At the present time (2017), you can find managed service providers that charge monthly from $20 per seat up to $400 per seat (usually includes some hardware at the top end). Given what it takes to staff an IT department properly with qualified people that stay current on technical training, the low end of the scale will more than likely not give you the right result for your company. Again, if you do not spend the right amount on IT, the cost to your company will be significantly higher than what you are spending on IT. A quality managed service plan that is proactive and founded on a solid foundation of formal best practices will generally run from $125 to $150 per user per month. If you have 50 users, then your monthly cost would range from $75000 to $90,000 per year…which is in the range of a single person above. The difference is that you get a fully staffed team that covers all roles required.
Company size and the cost of a fully staffed IT Department has many factors you should consider in determining which IT Support Model and the quality of support. CIS proudly services the Dallas/Forth Worth area with the following managed IT support services. Request a quote and learn more about our managed IT services.