Internal IT vs Managed IT

There are some functions that most businesses are used to outsourcing. Most use an accountant to get the best from their income, and trying to handle legal matters in-house would be more foolish than brave, unless you’re a legal business. Increasingly, the same can be said of IT.

There are a few factors at play. Certainly, the desire to focus on core business is central to the decision. Emerging technologies make it realistic for a managed service provider to support an organisation with more than 100 staff. And while IT has become more central to all sorts of organisations, managing technology has become more complex.

Just recently, a company with 100 staff in five locations contacted me. Things weren’t working out with their internal IT person. We talked about what value a managed service can offer, and how it compares to simply replacing the departing staff member. Here are some of the considerations we discussed:

Cost

Usually, a direct comparison will show a managed service as being on a par or slightly less than managing IT in-house. When you factor in additional costs beyond salary, the gap widens. If you’re looking at a comparison, don’t forget to include things like sick leave, holiday cover, training, software, and the cost of recruiting and replacing staff.

Range of Skills

Once upon a time, a good generalist could manage most IT needs in-house, but those days are over. In a large corporation, there will be specialists in areas such as security, databases, automation, networking, cloud… clearly not in the budget of a smaller business. A good managed services partner will have all these specialists and more, so even if you only need them occasionally, you won’t miss out on vital expertise. Because these specialists work with multiple clients, they tend to be a great source of information about what similar sized organisations are doing to get the best outcome from their IT spend.

Reporting

Service offerings vary, but most managed service providers will supply monthly reporting, using their own tools that are not available for purchase. You get powerful insights into your business, without the prohibitive cost of establishing and managing an in-house system for that purpose.

Automation

This may again vary between providers, but TechPath’s managed service customers have access to an automation specialist. They identify opportunities for strategic systems automations, taking repetitive tasks so that our customers’ staff can concentrate on the human element they do best. Most small and mid-sized companies simply wouldn’t have the systems to do this.

A managed service provider, on the other hand, writes automation code for hundreds of customers, so there is an economy of scale. One of the things we love is to see how a little of our time working on automation for a client frees up a worker for a several hours a week, simply by removing repetitive, manual tasks.

Certification

Even the best employers find it hard to spare their internal IT staff for training, and that impacts career progression. Courses are expensive and time-consuming, but technology moves fast and without ongoing training, skills can quickly become outdated. In a professional managed services organisation, career progression is built around ongoing education, with IT professionals benefitting from completing milestones and gaining new certifications. There’s more time for acquiring ‘soft’ skills as well, with the opportunity to study a wide variety of subjects. Our technical staff spend days each month on a broad variety of skill acquisition, often studying together to motivate each other – and yes, sometimes it can get a little competitive!

Management

In reality, many in-house staff managing IT wear a few hats. If somebody comes from a marketing or accounting background, for example, you may have some of your most expensive staff spending hours struggling with an IT task that they are not trained for – and that the right IT specialist can do in minutes. The systems and processes in place may not be designed for IT to flourish, and the career progression may not be a good match for their personal ambitions. Managing IT for a non-IT person is inevitably stressful and frustrating, which can spill out onto their main role.

Scale

Under a managed services arrangement, it is easy to add or remove users, whether due to seasonal peaks or changes in the business. While we can’t speak for other providers, we choose not to lock customers into a contract, so they can adjust as they need, without financial penalty.

Processes

There’s a growing shortage of skilled IT staff, and small to mid-sized businesses are finding it hardest to compete for resources. If someone leaves, a lot of knowledge goes with them because of a lack of documentation around systems and processes. A managed service provider is better positioned to provide continuity – for example, every support ticket is tracked, and our support staff can spot trends that identify issues and rectify them before a problem affects users. It is our job to do what it takes to work to an agreed service level, so that customers know they can expect an agreed outcome without stressing the details.

While every situation is different, very few smaller organisations are positioned to manage IT in-house without it becoming a costly distraction. Time to rethink how your organisation manages technology? Chat with the friendly TechPath experts.