When owners and executives look to flesh out small businesses, they will often attempt to establish an in-house IT department.
The logic behind this desire is sound. In the digital world we live in, IT is the backbone of any small business’ operations. By providing internal IT support, top-level decision-makers can maintain maximum control of this important area and personalized assistance can be provided with relative ease.
However, company IT needs can easily stack up and get out of hand. You may also encounter certain projects that require a specialized IT skill set for a short period of time. As these needs compound, your in-house IT team could find it difficult to cover everything.
In these cases, businesses should consider outsourced IT support services.
Outsourced IT support can provide your business with a short-or-long-term boost to its IT expertise, allowing you and your team to tackle a broader scope of projects and challenges. From a workload standpoint as well, external firms will provide your internal IT professionals with increased availability.
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What is Outsourced IT Support?
The term outsourced IT support refers to the practice of relying on external firms for any part of a business’ IT infrastructure.
Just as your company’s technology network may be vast and affect all parts of your business, so too can outsourced IT support. You can outsource functions such as:
- Utility services
- Software and cloud solutions
- Data warehousing
- User help desk services
While the different components of your IT network may require professionals with different skill sets to properly manage them, there’s one connecting thread between all of them: they require a technical background that your internal staff may not have.
Technical need is a major factor in companies bringing in outsourced IT support. In fact, a survey by Clutch found that 37% of small business respondents outsource IT services.
This field is tied with accounting, another technically-driven discipline, for the field with the highest percentage.
Especially for engagements where specialized IT experts are needed for just a short period of time, outsourcing offers a great degree of flexibility that can net your business cost savings.
However, two of the most popular areas for IT outsourcing, managed IT services and SaaS solutions, call for longer-term engagements with IT service providers.
Understanding the difference between these two major service providers is key to successfully integrating outsourced IT support into your business operations.
Managed IT Services vs SaaS Solutions
When you think of outsourced IT support, the first type of company that pops into your head is probably one that provides managed IT services.
What are Managed IT Service Providers?
A managed IT service provider (MSP) is hired by a company in search of assistance with maintaining and improving business processes from a technical standpoint. Once hired, an MSP is responsible for IT management, namely setting up and maintaining components of your company’s IT infrastructure.
MSPs are typically associated with maintaining network operations and providing data warehousing services. However, they can also be tasked with integrating other service providers’ offerings into your IT framework.
What are SaaS Solutions Providers?
By contrast, software as a service (SaaS) solutions providers will offer your business software that they own, deliver, and manage themselves. Rather than offer you a specific set of services, they will sell you a version of their software to meet your business needs.
Examples of popular SaaS solutions include:
While a SaaS provider may offer assistance with implementing and maintaining their software within the context of your IT network, their primary function is to maintain the software on their end. In addition, they may offer a similar solution to a number of other businesses.
These two types of service providers can and should be complementary within your IT infrastructure. In fact, an MSP may solicit, implement, and maintain a SaaS solution to help your network better serve you and your team.
Although managed IT service providers and SaaS solutions companies are two distinct entities within the world of outsourced IT support, they both can be invaluable additions to any business technology framework.
What IT Services are Included in Outsourced IT Support?
Outsourced IT support isn’t limited to just general troubleshooting. There are tons of tasks and specialized services that you may request from a service provider. Here are just a few:
- Cybersecurity: IT solutions can be implemented to ensure a high standard of network security
- Help desk offerings: an IT support team on-call for troubleshooting and addressing staff IT issues
- Disaster recovery: a team assists after a cyber attack, providing tech support needed to develop a recovery plan
- Network monitoring: real-time monitoring of your network, reducing the risk of cybersecurity issues and downtime
- Additional IT projects: an IT company can elevate IT infrastructure, offer IT consulting, or other forms of technical support that meet business needs
Because of the range of services possible in IT engagements, it’s important to discuss the full scope of possibilities with providers before you choose one to hire. Consider whether you’re looking for a full-service company or more a la carte, specialized services.
For example, say you’re a business that just suffered a security breach. You don’t want to hire a full-service IT team. Instead, you’re looking for someone to address cybersecurity and manage the breach itself. In that case, you’d be looking for a pretty specialized service provider.
How Much Does IT Outsourcing Cost?
As we’ve outlined so far in this article, one of the reasons outsourced IT support can add value to a small-to-medium-sized business is through the specialized technical knowledge IT professionals can provide.
Type of IT Service
$110–$165 USD per month per user
$99,000 USD annually
|$38,400 USD per year for enterprise solutions||
US-based: $154-$163 USD per hour
What Does MSP Cost?
This knowledge may sound like it will only be attainable for a hefty price. For many, though, IT outsourcing can be surprisingly cost-effective.
- For an MSP, for instance, you can expect to pay anywhere from $110 to $165 USD per month per user.
- For a 50-person business, this range dictates that the most you should pay for this service would be about $99,000 USD per year.
While this may sound like a lot, it’s important to remember that you’ll likely be essentially adding multiple FTEs to your team without having to pay any overhead costs.
How Much Do SaaS Solutions Cost?
SaaS solutions will likely cost less as they don’t typically have dedicated resources allocated to your company. For Hubspot, a leading marketing and CRM SaaS solution, the standard pricing for the premium “Enterprise” service level is $38,400 USD per year as of June 2022.
What Do IT Support Teammates Charge?
Other outsourced IT professionals will vary in cost depending on both the skills they have and the region in which they’re based.
For example, if you’re embarking on a software development project and looking to bring in a senior developer to assist your team, 2018 data would dictate that you could expect to pay $154-$163 USD per hour for a US-based resource versus $45-$70 USD per hour for an Eastern Europe-based IT team.
Depending on the level of support you and your team will require from an outsourced IT team, certain payment plans may be more advantageous to your business than others.
If you require minimal support in a particular area and don’t expect many hours overruns, negotiating an hourly service rate with your IT support partner might help keep operating costs down.
On the other hand, if you require ad-hoc communication and support with the potential to log many hours, a monthly fee would keep your IT outsourcing costs both predictable and limited.
As you can see, with many factors influencing the equation, “how much does IT outsourcing cost?” can be a difficult question to answer succinctly. However, this variability can work in your business’ favor if you have a clear idea of what services you need and the duration for which you’ll need these services.
What are the Benefits of IT Outsourcing?
In outlining the factors, characteristics, and costs surrounding outsourced IT support, we’ve already touched on some of the benefits the practice can deliver for you and your business.
See below for a list of potential benefits IT outsourcing can provide for your company:
Net Cost Savings
IT support can hugely impact a company’s bottom line. As demonstrated when discussing outsourcing costs, you can often net serious IT cost savings and avoid overhead costs entirely by looking to external firms for support.
Additionally, working with an outside company rather than seeking out an in-house solution allows you to tailor the hours dedicated to a particular IT function to your exact specifications.
For instance, say you need 10 hours of UX development services each month for a web development project. If you don’t want to bring in a full-time employee and find other work for them to do, your options are to either outsource the job to a firm that can provide a resource for this limited amount of time or seek out a part-time employee.
The part-time employee option may seem enticing, especially if the UX need is a long-term one. However, according to data from the US Bureau of Labor Statistics, there were over 6 times as many people over the age of 20 looking for full-time employment versus part-time employment in 2021. As such, finding a part-time employee to bring in may end up being a daunting task.
With the ability to fit assignments to business needs as well as to limit costs overall, outsourced IT support can end up being a savvy financial move.
Increased Operational Flexibility
Another advantage of IT outsourcing is the leanness and flexibility it provides to your organization.
By employing a practice known as staff augmentation, by which your business fills short-term needs with IT experts who work for a different company, you can scale your operation up and down as needed to meet any customer requirements.
Moreover, outsourcing allows your company to easily expand its geographical hiring footprint. Even with 27.7 percent of the US workforce projected to be fully remote in five years, there’s still an expectation that in-house will be operating in a similar time zone to your business.
However, with an outsourced IT professional, you can easily integrate someone on the other side of the globe into your company’s operations. In doing so, you’ll be broadening the talent pool from which you can hire and increasing the ease with which you can find someone to meet your business needs.
Improve the Cohesiveness of Your Internal Team
Especially for small-to-medium-sized businesses, incorporating too many functions into the responsibilities of your in-house team can lead to confusion and operational mediocrity.
Bringing in outsourced IT support can help prevent your team from being stretched too thin. With tech-related disciplines often having steep learning curves, adding these sorts of responsibilities to your internal team could be detrimental to your overall efficiency.
By outsourcing these responsibilities to experienced IT professionals, not only will you ensure that any IT-related tasks are handled properly but you will also keep the focus of your internal team on the core of your business.
What are the Drawbacks of Outsourced IT Service Providers?
We’ve reviewed the benefits of IT outsourcing at length, but it’s important that you also understand that certain business situations don’t lend themselves to the presence of outsourced IT support.
See below for a list of potential drawbacks of IT outsourcing:
Regulatory and Cost Challenges
If you’re planning to fill a long-term, full-time position with an outsourced IT professional, you may lose some of the cost benefits you would otherwise net.
If you’re pulling from the same geographic region, you can expect to pay a premium for an external resource versus an internal one.
This premium is designed to negate the added risk of working as a contractor while also covering the cost of any benefits you wouldn’t be expected to provide.
Even if you do pull all your outsourced professionals from a different region then your own, you may still run into operational issues.
If your company operates in a highly-regulated industry such as government contracting, you may have contractual or even legal obligations to employ only domestic workers.
Operating with too large of a geographic footprint can present day-to-day challenges with coordinating across time zones.
For instance, imagine you own a business based in the eastern US, but your entire web development team is based in Eastern Europe.
If your website crashes during normal business hours in the US and you have no one on your internal team with the knowledge needed to fix it, you would be at the mercy of the outsourced team’s schedule to get the fix made.
While many internationally-operating companies tailor their hours to better fit the client’s schedule, the 7-hour time difference between the eastern US and Eastern Europe could negate any scheduling accommodations.
Even in a less drastic situation, outsourced employees are under less of an obligation to respond to correspondence from you and your team. These professionals are often working with multiple companies at a time and will have their attention split between your company and several others.
Fragmentation Within Your Team
On a non-macro level, integrating outsourced IT support into your team can come with some inherent difficulties as well.
Especially in smaller businesses, an all-internal team is likely to share similar values and be committed to your business’ mission statement and value proposition.
When introducing outsourced labor into this equation, you run the risk of diluting your business’ values and creating fragmentation between in-house and outsourced team members.
Even if you don’t have to formally onboard outsourced IT professionals, you’ll still want to introduce them into your business framework in a patient and dedicated manner.
Ensure they understand your goals and what you expect from them to help you accomplish those goals. In addition, you’ll want to prioritize regular communication in your working relationship with them to not only maximize the efficiency of the engagement, but also to keep them connected with you and your team.
Is Outsourced IT Support Worth It?
In short, hiring a team of IT experts is worth the cost for peace of mind. Running a small business is stressful enough without the pressure of handling IT.
A managed service provider, SaaS solution vendor, or other outsourced IT professional can come into your business with a wealth of accrued experience and make a difference very quickly.
As we’ve discussed, outsourced IT support can net your business serious cost savings while offering operational flexibility and allowing your internal team to remain more focused on your core mission.
However, if an outsourcing engagement is handled improperly, you could run into regulatory and cost challenges, geographic difficulties, and fragmentation within your internal team.
In many situations, IT outsourcing can elevate your company’s capabilities at a reasonable cost. As with any vendor relationship, though, be sure to track your ROI regularly and assess whether or not you’re seeing optimal value.
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