To Outsource, or Not to Outsource (Your Tech)?

By Chris David and Franklin Aguilar

That is the question. Contrary to popular belief, IT is not just a couple geeks in the basement with wild hair, crazy glasses and sweaters. Information technology makes the backbone of your organization and is one of the largest investments a company will make. In 2020 and beyond, having skilled professionals in your IT department will make the difference between cutting-edge and falling by the wayside.

But good IT is also expensive. You, as a leader in your organization, must weigh the cost versus value. You want high quality tech for your company, but how much is too much? Are you spending too much in technology?

Can you save money by outsourcing your IT department and technology assets?

Sometimes outsourcing can be even more expensive than in-house. The difference depends on your company structure, your organization goals and your desired level of service.

But what is information technology really?

IT is not a cost center

Your IT department can be one of of the biggest sources of value in your company, even for companies that are not tech-centric.

Are you running a school or a non-profit? A doctor’s office, a lumberyard, a property management business or a mom-and-pop corner store? Good quality tech helps you constantly improve your business, make more money, keep more money and reach more customers.

That’s right. Saving money equals earning money. So it’s time to stop thinking about information technology as a cost center in your business.

High quality IT will generate value for your organization through:

Communication

Between you, your employees and your customers

Knowledge

Of your business, your sources of revenue, your expenses and industry trends

Innovation

By saving time and inventing new ways of doing things (get rid of the paper!)

You get what you pay for

Would you buy a beat-up old car and expect it to go zero to 60 in under five seconds? So don’t expect cheap IT to generate much value either.

High quality solutions will be pricey. Skilled, certified professionals have spent years learning their craft and completing their education. Having the right tech and good staff will build your business on a firm foundation.

This goes for in-house and outsourced options. If you aren’t willing to invest up front, then don’t expect much value generation later.

Are you investing in technology or just puttering along?
Are you investing in technology or just puttering along?

Benefits of outsourcing

Smaller companies (two to twenty employees) will benefit the most by outsourcing IT department functions. Mid-size organizations (twenty to 50) can also reap advantages.

Reduced costs

By outsourcing your information technology, you’ll spread out your staff salary and benefit cost, effectively sharing the burden with the other service provider customers.

Scalable

Contracting with an outside service provider gives you flexibility. You will have the flexibility to cut back on costs as needed, or upscale your services as your company grows.

Outside experts

An outside service provider will have professionals with many different specialties on staff, ready to assist. Facing a unique situation? The IT service provider will have an expert on hand to deal with your questions, or will refer you to someone that can.

Around-the-clock support

A proper IT service provider offers 24/7 support. Did your website or server go down in the middle of the night? They will have someone on staff to fix that.

Pitfalls

As your organization grows (more than 50 employees), the advantage of having in-house personnel becomes more apparent, while outsourcing will grow more costly. Any company of at least 20 employees will probably benefit by having at least one full-time IT person on staff.

Response times

You are not the only customer of the IT service provider. The provider might have dozens or hundreds of other companies hiring their services. And any number of these could be calling in at the same moment, needing support. Your call will go to the back of the line, in a helpdesk cue.

Lack of responsibility

There’s something to be said about having your own staff member or department solely responsible for IT.  You always know who to talk to in case of a problem, and the buck stops with them. This is not the case with outsourcing.

Sales pitch versus reality

The sales team from your IT service provider talked a good game. One hour response times. One hundred percent uptime. Fixed costs. But will reality live up to the sales pitch? Make sure you understand the contract and read the fine print before you sign the deal.

No knowledge of your company

An outsourced service provider has little to no knowledge of your business, your mission or your goals. Your own staff will understand your company and be invested in its success.

Strategic outsourcing

For organizations of any size, consider special, one-time projects where hiring your own staff might be cost prohibitive or impossible. Need a new website developed? A network or phone system installed? You can strategically outsource these projects to independent experts.

Let your own IT staff manage the outsourced expert(s). They will speak the same IT language and work together to deliver the results you need.

To outsource, or not to outsource?

The decision comes down to you, your company, your budget and your goals. How many employees do you have? Are you a tech-centric business? Will you be willing to spend the money to truly invest in IT and build your company for the future?

Conclusion

Small to midsize companies will gain the most benefit and save the most money by outsourcing their information technology. Larger companies (greater than 50 staff) and tech-centric businesses should always have their own IT people on staff, with clearly defined roles and responsibilities. Organizations of any size can benefit from strategic outsourcing, selecting specialized projects and areas to contract out.

Should you outsource your IT?

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