Outsourcing IT: Pros & Cons

Outsourcing IT is the process of hiring a third-party service provider to manage all or part of an organization's IT department. There are many factors that businesses need to take into account before deciding to outsource.

Consider:

1. Company size 
2. What your company needs (complexity and service)
3. What your company has (existing IT skills)
4. Support hours needed 
5. Service type (in-person or remote)

IT Service Types:

• Managed services (partial-full services)
• On-demand or break-fix services 
• Cloud services (DocuWare or Microsoft365 for example)
• Staff augmentation 
• Project based services 
• Offshore services

Pros & Cons of Outsourcing IT 

Costs:

• Managed services - $75-175 per hour or roughly $1500-2000 a month.
• On-demand or break-fix services - $75-200 per hour plus parts.
• Cloud services - $6-30 per month.
• Staff augmentation - $50-100 per hour plus parts/devices.
• Project based services - starts at $10,000 plus parts and labor.

In-House Costs:

• $70,000-100,000 base salary plus 20-30% on top to include benefits for each IT employee.
• Plus, the cost of training, parts, software and devices. 

While in-house IT departments have the benefit of convenience, they cost almost 4 times what outsourcing IT would cost. Without analyzing your company's size, scope of service, complexity, and what support is needed neither option will be beneficial. For example, outsourcing is particularly beneficial to consumer brands and DC2 companies in the $5 million+ range. Companies outside of that range can benefit from outsourced IT as well.

Final Thoughts:

Outsourcing IT isn’t a one-size-fits-all solution; it’s a strategic decision that depends on your company’s size, complexity, and long-term goals. By weighing factors like service type, support needs, and cost, businesses can determine whether outsourcing offers the flexibility and expertise they need without the overhead of an in-house team. For many organizations, outsourcing provides a scalable, cost-effective way to stay competitive and secure in today’s technology-driven world. The key is to analyze your unique requirements and choose a partner that aligns with your business objectives.