Outsource, Insource, or Both?
Depending upon the size, budget, and general management attitude toward managed IT or IT support models, each role within an IT department gives varying levels of resources and attention. The impact of insufficient resources for any IT functions will cause problems within an entire organization, making for an inefficient, costly, and time-consuming headache among all departments. (Just think about the last time a computer crashed, the WiFi went out, or an email wouldn’t send out – it causes chaos for even the most advanced workplaces!)
Unfortunately, we find it all too common that many of the higher-level positions (CIO and IT Director) have no resources. The general result of this is lower efficiency and effectiveness of an organization that leads to financial loss. We also find that many times, the cost of having the wrong IT support is much greater than the actual cost of that support. For example, if you have 100 employees averaging $50,000 per year in burdened cost, then a 5% loss of productivity would cost $250,000 in labor costs alone. This does not factor in the additional cost of poor customer service, missed sales, etc.
In order to better understand what kind of IT support model you need to run your organization effectively, we’ve broken down three generic models for IT support – each of which takes a different approach to IT management and helps organizations make overall processes more efficient.
Three generic IT support models:
- Full Outsource: The entire IT Department is handled by a managed service provider (MSP).
Outsourcing your IT with an MSP helps take the burden of IT management off the plate of busy business owners so they can stay focused on the core functions of their business. Outsourcing is typically a less expensive option, as there are minimal training and time involved with IT management, and outsourcing typically converts fixed IT costs into variable costs which allow you budget effectively, meaning you only pay for what you use when you need it. By outsourcing, IT administration is trusted with the experts to provide leadership and professional expertise for IT solutions.
- Full Insource: The entire IT Department is in-house.
An alternative to outsourcing, insourcing is seen as a solution to the problems of control and sometimes hidden costs with outsourcing. Done well, insourcing builds a team of skilled people who focus on the day-to-day and strategy of a business IT network and a team that can handle everything in-house. However, insourced IT can be extremely costly, as it requires time, training, employee salaries and benefits, and management. For organizations that do not have the time, money, or resources to support a full staff of IT professionals in-house, insourcing can cause a vast corruption of issues that lead to an unsuccessful IT solution for the whole company.
- Hybrid: The IT Department is partially split between being in-house and outsourced.
- Hybrid IT is an approach to IT management in which an organization provides and manages some IT resources in-house, but uses outside services for others. This approach typically allows an organization to maintain a centralized approach to IT governance, while relying on the experts to handle the functionality that is out of reach for an in-house provider. A hybrid IT model requires internal and external IT professionals to support the business capabilities of the enterprise and requires the collaboration of multiple parties to agree on how to grow an IT network.
Regardless of which IT support model you choose, having inadequately supported IT systems is a poor management choice. It’s important for you to understand the economic decision and the direct costs of acquiring the necessary resources for insourcing your IT Department, as this decision should consider the direct costs of every position, as well as the impact of not having a stable resource.
For more information on how CIS can help your organization with managed IT services, contact us today.