4 IT Support Options: Insource vs Outsource vs Mixed

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December 4, 2020

Businesses have 4 IT support options: insourced, outsourced, and mixed.

What changes and challenges are happening in your business?

Several factors inspire companies to analyze their IT support: office moves, sales growth, adding headcount, quality of service issues, data breaches, compliance concerns, and lack of proactive guidance or strategy.

Are you getting a lot of user complaints? Working from home and using cloud applications doesn’t always work as planned.

Maybe you’re a well-funded startup or doing some due diligence to ensure your current arrangement delivers the competitive advantage you deserve.

Is your provider or small IT department slow to respond? (No offense if you’re this person.)

At Integris, we help businesses like yours solve IT problems daily. And one of the most common questions we hear from prospective clients is, ‘should I insource or outsource my IT?’

While our primary offerings are managed IT and co-managed IT, we’re realists and understand our model is not always the best option for every business.

This article aims to show you various business solutions and help you find the right fit.

 

Which IT Support Option is Best For Your Small to Midsize Business or Nonprofit?

IT Support Option #1 – Do-It-Yourself IT Support

Do-It-Yourself IT means you or a colleague manage all of your technology in addition to your primary job duties.

What Are The Pros?

Doing it yourself saves money if you can’t afford to pay someone else to do this. Business owners with fewer than five employees find this hard cost reduction irresistible.

Some people like IT and enjoy tinkering. I know a closing attorney who has a server stack in his office. He also reads software manuals on long flights.

You get a sense of control, calling all the shots on the technology employed to grow your business.

For organizations with relatively simple technology needs, you enjoy independence and immediacy.

Applications like M365, Vonage, Gmail, and DropBox give smaller organizations many easy-to-manage subscription-based cloud solutions.

What Are The Cons?

Doing it yourself increases soft costs. As business demands increase, self-managed IT will require more of a time commitment.

Security breaches and data loss due to failed backups are most prevalent with this model.

As you expand, you may start to lose control but not know it. Applications are easy to buy online. However, many have confusing control panels that look like the cockpit of a Boeing 747.

Microsoft 365 (M365) has many features that your average person will not know how to set up. For example, user email accounts in M365 require configuration for automatic backup. Missing this detail can equate to years of lost data.

Cloud applications from different companies may be relatively simple to operate independently. Complexity arises when multiple applications need to be integrated, making you more dependent on disparate parties. Unless they cooperate promptly, the immediacy factor evaporates.

Executives who self-resolve IT problems – conservatively speaking – spend an average of two hours a week or 100 hours a year on this activity. This schedule is insufficient to keep systems healthy and secure.

Self-resolvers focus almost exclusively on breakdowns instead of leveraging automated monitoring and maintenance tools that keep systems working optimally.

When self-resolving IT, you waste valuable time working in the business rather than on the business.

This model typically leaves everyone in the business to fend for themselves, including signing up for unapproved IT services, known as “Shadow IT.” According to KnowBe4, Shadow IT is responsible for 33% of all cyber-attacks.

Finally, it’s impossible to keep up if you’re not a cloud specialist, system engineer, network engineer, or security professional with regular training and earning updated certifications.

IT Support Option #2 – Dedicated IT Support Staff

Your team includes one or several full-time IT specialists who manage infrastructure: servers, cloud applications, user help desk, network, firewall, backup and disaster recovery, telecom, and vendor management. Wikipedia Definition of Typical Services

Application specialists are a different breed from the infrastructure team. They have the skill sets to provide a line of business application support, software development, project, and program management.

CornerCap Investment Counsel manages CornerCap Funds with a proprietary portfolio management program that requires the time and attention of an application development specialist to support a custom application developed specifically for their business. Level 1 help desk tickets are not part of his job description.

Your organization’s size and technology needs will dictate the combination you require.

What Are The Pros?

The larger your headcount, the more likely you’ll have users with varying levels of competency and patience. Have you met many Type A personalities who politely suffer a printer error or forgotten password when a deadline looms?

If your business has over 100 people, an in-house IT team with infrastructure and application specialists can be convenient for grab-by-the-collar, just-in-time help requests.

Technology adoption and enthusiasm are also affected by the age of your team. Younger employees, who have grown up around technology, will jump right in.

Older employees may be less engaged. I have a good friend whose father retired ten years early because he didn’t like using email.

A robust in-house presence also makes sense if IT is your core business and service delivery depends on a unique IT application that requires full-time support.

You may even get team members who want to work in your particular industry because it’s part of their life’s mission. They wish to stop human trafficking, promote better healthcare outcomes, or help people attain financial freedom.

What could be better than passionate employees who become a valuable part of your culture?

What Are The Cons?

Full-time IT employees are accessible to everyone, including demanding users who may not follow standard support request protocols. When stronger personalities push and shove, higher-priority issues and projects suffer.

This political dynamic creates strife, hinders your operating efficiency, and could increase your legal exposure.

Would you rather have someone help a forceful executive format a PowerPoint or finish patching a mission-critical web infrastructure? An unpatched web server triggered the Equifax data breach.

In-house IT professionals are also likely to be on call 24/7 or be in a rotation to share this duty with others. Their workdays can be unpredictable. Vacations and sick leave can also create gaps.

And it’s not uncommon for executives to expect assistance with home computing needs after-hours or on weekends. These factors lead to burnout and staff turnover.

Strong IT professionals are always in demand.

Cloud specialists, system engineers, network engineers, project managers, CISOs, CIOs, and CTOs, are expensive resources. An IT Help Desk/Technical Support Professional can command $63,000 a year while an IT Manager can fetch $150,000. For more details, See Salaries For Information Technology Services Professionals.

Not only is the median pay for IT professionals more than double the salary of all other US occupations, but compensation also rises yearly and boasts an unemployment rate of 2.8% versus the national average of 10.2%, as per IT Career Finder.

Strong IT professionals get contacted all the time. Recruiters call them regularly with lucrative financial incentives to jump ship. So the ambitious ones tend to leave for new challenges while the less enterprising ones stick around.

When key people leave, they depart with institutional knowledge. Quality documentation is not always maintained and shared. Other IT professionals see knowledge as job security and don’t want to give away the keys to the kingdom.

Are you comfortable with either scenario? If you have concerns around single points of failure and risk, I can’t imagine your answer would be yes.

How do you feel about having to manage and mentor IT people? Many businesses don’t have this expertise. Many companies also have no idea if their IT people are doing a good job or how to evaluate their performance.

Finally, your expenses climb when you add the cost of employee benefits, training, real estate space, and the hardware/software required to build out in-house IT management infrastructure.

IT Support Option #3 – Hourly or Break/Fix IT Support

Break/Fix IT is prevalent in the small business market. The model is similar to that of a plumber, electrician, or HVAC vendor. Clients pay for services “by the drink” on an as-needed basis. An IT consultant is essentially “on-call” to solve technical problems as they arise.

The mentality is very similar to Do-It-Yourself IT, except you recognize the need to get help from a more qualified third party. Hourly IT support is a cottage industry with hundreds of sole proprietors in any major city, including national brands like Best Buy Geek Squad.

What Are The Pros?

Break/fix IT support doesn’t require any upfront financial commitments, making it cost-effective for companies with fewer than ten people, basic systems, and minimal reliance on technology. In some cases, monthly retainers, fees for block-time agreements, or budgeted hours apply.

Some business owners are so practical they can’t fathom paying for something unless it’s broken.

The client maintains a tighter control on spending and is empowered to authorize all activities and associated costs, including selecting different vendors for different IT initiatives: internet, phone system, AV, etc.

Break/fix might be all you can afford when getting started.

Or it could be a convenient band-aid while an IT resource is unavailable or being hired/replaced.

What Are The Cons?

There is a direct correlation between reactive hourly services and less favorable business outcomes. What can go wrong? The hourly resource is seldom available at the exact moment you need them.

Break/Fix resources don’t have the luxury of using pre-installed professional services automation or 24/7 remote monitoring and management software, which puts them at a severe disadvantage.

Since they lack visibility, data insights, and control of all the moving parts of your IT systems, they must begin every encounter from the ground up. In many cases, they’re learning on the job.

Their technical expertise is limited to tactical fixes rather than understanding how individual technologies fit and should perform within a broader system. So they lack the visibility to identify the root causes of problems.

Your business gets disrupted when problems emerge outside standard business hours. And since system alerts will not be activated automatically, you must identify the issue and report it to the provider.

Break/fix service does not come with Service Level Agreements or guaranteed response times, leading to extended wait times and escalated emergency fees.

This less mature business model consists of smaller providers and independent contractors. Both usually lack network, cloud, and security expertise. In today’s connected world, you can’t afford to have gaps.

The hourly resource can also go on vacation, have other clients, go on maternity leave, or exit the business without warning. Is this single point of failure worth the risk?

Integris once received a call on a Saturday from a frantic CPA who suffered a catastrophic data loss. First, her 10-year-old small business server dies. Second, her various break/fix vendors were nowhere to be found—ditto on any backups or network diagrams.

Smart CPA. Bad IT decision-maker.

IT Support Option #4 – Managed IT Services & Support

Managed IT Services is a fully outsourced solution for small and midsize businesses to enjoy a portfolio of people, processes, and technology on a fixed-fee basis. It’s a subscription model where you essentially rent fractional ownership of a corporate IT department instead of building it and managing it yourself.

The managed services model initially gained popularity in the early ’90s in the large enterprise market, which produced innovations that are now available to much smaller entities. Please see the following Managed Services Market Report for more perspective on the viability of this industry.

What Are The Pros?

Best-in-class IT providers put a great deal of emphasis on understanding your strategy before making recommendations. This consultative approach sets the stage to optimize the performance of your environment. They can also lower your exposure to downtime, data loss, theft, or intrusion.

Managed IT gives you flexibility for 10 or 1000 employees. It can be scaled up or down. Do you need fully managed IT this quarter and Co-Managed IT next quarter? Either service can be expanded or contracted in short order.

Outsourcing replaces capital expenses with operating expenses. Instead of paying an in-house IT Director over $100,000 a year to serve a 50-person firm, an MSP with as few as ten employees can offer a more comprehensive array of services for $60,000 per year.

This preventative plan includes 24/7 remote monitoring and proactive maintenance.

Robust tools give MSPs a scale advantage.

Many full-service MSPs subscribe to client management tools with annual costs of $500,000 to $750,000. These expenses are easy to justify in an outsourced model because 50-100 different clients pay fixed fees that more than offset the MSP’s operating expenditures.

IT providers have cross-trained specialists on staff with deep expertise in constantly changing technology services and compliance frameworks. They stay ahead of the minutia, so you don’t have to.

Like every industry these days, managed IT services is a competitive field. It’s not uncommon for providers to structure agreements with 60-day out clauses. Businesses can move forward without the pressure to make a 12, 24, or 36-month commitment by making the contract terms less threatening.

Hiring an MSP simplifies operations. Instead of devoting employees to coordinating vendors, evaluating, deploying, and supporting technology, you outsource these functions to a single reliable company to manage your computing infrastructure. This partnership frees your team to focus on core business needs and strategic initiatives.

What Are The Cons?

The managed IT space has very low barriers to entry with hundreds of options in any given market. Many operators use the buzzword “MSP” very loosely. And some are more professional than others. You’ve got national companies that advertise on billboards and “MSPs” operating in basements by four guys in their NASCAR pajamas.

Your cybersecurity may be at risk. You can’t count on every vendor to follow standards and best practices or provide leadership and inspiration for you to do the same. You’re only as strong as your weakest link. Take, for example, the ransomware attack that hit a Colorado MSP and affected 100 of its clients. Ransomware In Colorado

Some companies don’t like giving control to an MSP. Integris once signed a 12-month agreement with a client who wanted to transition from in-house IT to outsourced IT. They paid us $7,000 a month and never allowed us to install remote monitoring and management software on their servers.

New MSP services are easier to roll out in the small and midsized business sector if they have the budget for Change Management. Larger companies can afford change management, while most smaller organizations cannot.

Big companies have big IT budgets.

When Coca-Cola’s IT department initiates a laptop refresh with new Microsoft Azure services, they hire management consulting companies to handle the pivot.

Doing the same project on a much smaller scale with a privately held, 40-person insurance brokerage could quickly turn into a hot mess.

Smaller businesses may change IT providers and not change the deep-seated organizational behaviors that caused their previous IT vendor relationship to sour.

If you hire any professional services organization – MSP, Law Firm, CPA, Financial Advisor – and refuse to follow their recommendations, the relationship will not last.

A successful partnership requires the provider to have an advisory relationship with the client’s primary influencers or IT Steering Committee. These key stakeholders must commit to meeting regularly to share strategy, business goals, and best practices and approve projects that will impact the business.

Some clients enthusiastically embrace replacing old or unsupported hardware and implementing cybersecurity best practices. Other clients won’t upgrade consumer-grade Wireless Access Points – even if they frequently lose connectivity, are unsecured, and process credit card transactions.

If you assign one person to exclusively manage the relationship – including running interference on every support ticket – you create an information vacuum, a quality of service bottleneck, and a single point of failure. Each hurts your business continuity.

MSPs can’t predict or prevent every one of your unplanned technology costs.

Some MSPs may be incapable of learning your business or be a bad fit for your culture.

With some IT companies, you’re just a number.

 

Where To Go From Here?

Figuring out what works best for you requires due diligence. And you may experience a few setbacks along the way.

Integris kissed a few proverbial frogs in our quest to find the right outsourced providers. We changed hardware and software vendors when their business practices and pricing models no longer made sense. Ditto on HR. We’re now with ADP.

We used to own servers and lease space in a data center. Now we use managed services specifically designed for managed services providers.

Here’s to learning new things every day. Schedule a free consultation if you would like to review different IT service options.

 

Jed is a Solution Advisor at Integris who has specialized in MSP solution development, sales, and marketing communications since 2003.

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