Should You Outsource Your IT Department?
43% of companies outsource IT support in some shape or form. Should that number be even higher? Should you outsource your IT? In a business culture that aggrandizes self-sufficient heroes, some businesses get ahead by shirking conventional wisdom and outsourcing their IT needs to expert partners and consultants.
IT outsourcing is often a good idea for companies with aggressive growth plans and limited IT experience. Likewise, business leaders that want to be able to focus on what they do best—growing a company—might want to save time and money by leaving IT to specialists.
Before you make this important decision for your company, however, remember this simple adage: There is no one-size-fits-all solution. What’s good for one company won’t necessarily help another.
That’s certainly the case with IT outsourcing. The following scenarios should give you a better idea on how to make your decision.
You Should Consider Outsourcing IT If:
Your company is in transition. There’s a critical stage in the growth of nearly every company: the transition from a small group of three to five founders and early members to a more robust team consisting of new outside hires. No longer will it suffice to work off of the same inexpensive cloud applications, use the same patchwork infrastructure and live by a do-it-yourself strategy when it comes to IT problem solving.
The larger companies get, the more complex collaboration becomes. From this point onward, new hires will need IT support. But you can’t hire a new team of IT specialists yet. In this case, IT outsourcing is very much worth consideration.
You don’t have a large budget available for in-house IT. Outsourcing an IT department is nearly always cheaper than growing one in-house. Some studies say that compared with building an in-house team, outsourcing IT saves as much as 50%. While that number might not be realistic for every enterprise, the business information technology community has arrived at a general consensus: outsourced IT costs less.
You need your IT costs to be predictable. With most outsourced IT, you’ll be able to pay a predetermined fee to contractors. If you need more support, that cost will go up, but once again, you can anticipate those types of costs. When building your own IT department, you’re pretty much guaranteed to run into unexpected costs. How much? Sorry, you won’t be able to figure that out until you’re coughing up the cash.
While you may not have to pay £140 million like the British government did to beef up the IT for its Universal Credit programme, the inability to predict your IT costs could stall the growth of your company—perhaps fatally.
You don’t have the expertise to run IT in your company. You want to be able to focus on the core processes of your company. Without reliable IT support, you won’t be able to do that.
You’re left with three options: 1) spend more and more time focusing on your IT department, 2) hire a quality CIO or 3) outsource your IT.
You don’t have the time or expertise to choose the first option. The second option is viable—and may indeed be the correct choice for many companies, especially large, stable enterprises—but the average CIO earns £118,000 per year and needs a budget many times that size to do her job well. For the average mid- to high-growth company, it just makes sense to choose the third option and outsource your IT.
You Need to Provide 24/7 IT Support. Many IT contractors offer round-the-clock support, something increasingly necessary in today’s nonstop business technology environment. Still, many companies aren’t prepared to handle the costs and responsibility of 24/7 IT support. In these cases, the solution is often outsourcing IT to firms specifically built to support organizations every hour of the day.
You Might Want to Think Twice About Outsourcing IT If:
Your IT needs are especially unique. When you outsource IT, you’re most likely hiring a company that performs a certain set of tasks very well. If your needs extend beyond the capabilities of an IT services contractor, then you might want to look elsewhere or consider building your own IT team from the ground up.
However, before eliminating the option of outsourcing your IT, make sure that your needs really are unique. Every company thinks that they have a one-in-a-million situation, but often that’s just not the case. Try not to think about this decision in terms of your business, but instead in terms of your support needs. Even if your company is the only one in the world selling firecrackers to the outer space alien market, if you require fairly typical IT processes like application support, server management and infrastructure maintenance, outsourcing might still be a good option.
You will definitely need a robust IT department in the future. What are your plans for growth? If your roadmap includes or requires a vibrant information technology department in the future, then think twice about outsourcing IT.
It will never be easy or cheap to manage your own infrastructure, run your own systems, and provide your own tech support. Sometimes, however, it’s a worthy investment. If you feel confident that your company will need to create a large IT department in the future, it might be wise to start the process now. That way, you’ll be more prepared and experienced when you really need your own IT.
You have concerns about the security of the available IT services contractor. Security is a no-brainer. One error can destroy companies. If you think your IT contractor might compromise your ability to keep your data secure, they should be eliminated from consideration.
On the flip side of the coin, many IT outsourcing firms actually present greater protection than an organic, home-grown IT department would, especially early on in the company’s growth.
You want your IT specialists to develop relationships with your employees and customers. Early on in the life of a startup, relationships act as capital. Companies who exhibit reliability, friendliness and helpfulness will find it easier to succeed than companies with impersonal, nonchalant support. This is just as true within companies as it is outside of them. Your employees aren’t necessarily your customers, but that doesn’t mean that they don’t care about how they’re treated by your IT folks, whether that IT is outsourced or in-house.
This piece of advice isn’t so much a caution against outsourcing IT as it is a call to properly audit any IT firm you should choose to hire. Likewise, if you build your IT in-house, try to help them make a positive contribution to company culture.
Deciding whether or not to outsource IT, like so many other decisions, comes down to an honest cost/benefit analysis. Do you have the resources to grow your own IT department? Is building your own IT department the best use of those resources? These are questions only you can answer about your own company.
Also, try to remember that the situation isn’t black and white. Certain portions of the IT department’s responsibilities, like application support and strategic consulting, can be viewed as a joint effort between your IT leaders and experienced, skilled IT consultants able to offer a fresh perspective on your business.