To Outsource or Build an I.T. Organization in House

There is a point at which a business needs to decide, do we need our own I.T. department? If you are a tech startup, you likely already have one. If you are a business in most any other industry, the question is far more complicated. As a retailer, how many stores do I need before it makes sense to bring I.T. in house? As a manufacturer, what throughput do I need or at what scale before I need an I.T. organization?

Meet the MSP. An MSP, or Managed Service Provider, is a company that remotely manages a customer's IT infrastructure and/or end-user systems, typically on a proactive basis and under a subscription model. The range of services an MSP offers can vary widely but generally includes tasks such as network, application, infrastructure, and security management, as well as support and technical services, all of that stuff that you don't want to have to deal with as a non-technical business.

Services Offered by MSPs

MSPs offer a broad spectrum of services, including but not limited to:

• Network Management: This includes monitoring and maintenance of network infrastructure whether it be in retail stores, warehouses, or the main office.
• Cloud Services: Managing cloud infrastructure, applications, databases, employee credentials, etc.
• Cybersecurity Services: Providing security solutions, firewalls, monitoring, and incident response.
• Data Analytics and Business Intelligence: Offering full business intelligence and analytics services including managing data, ETL services, building reports and dashboards and providing guidance.
• Support and Help Desk Services: Providing technical support for IT-related issues like workstation issues, phone issues, service issues and physical infrastructure issues.
• Infrastructure Management: Overseeing physical and virtual infrastructure both on premises and in the cloud.
• Consulting and Strategy: Advising on IT strategies and digital transformation to help make the proper investments on technology for your business.

If these are the things you don't want to worry about, then an MSP may be for you. But, there are further considerations to choosing a managed service provider over hiring I.T. in house. Let's look at some of the benefits and deterrents of each.

Hiring an MSP vs. In-House IT Management

Pros of Hiring an MSP:

1. Expertise and Specialization: MSPs often have a higher level of expertise and specialized knowledge. Having one to two people in house will not have the deep skills bench of an MSP that can switch people on and off your account as needed to meet your needs as they change.
2. Cost-Effective: Can be more cost-effective than maintaining a full in-house team, especially for small to medium-sized businesses. If you only need 10 hours of maintenance support on your cloud a week, it doesn't make sense to have a full time cloud specialist in house.
3. Proactive Maintenance and Monitoring: Continuous monitoring can prevent issues before they arise. Instead of having to build monitoring from the ground up, most MSP's come in with their own monitoring to proactively maintain systems.
4. Scalability: Easy to scale services up or down based on business needs. As an example if you need to migrate from Google to Microsoft, you wont have to get rid of your Google developers and hire Microsoft developers. Your MSP can easily transition teams and scale up for the transition and scale down after to offer just ongoing support.

Cons of Hiring an MSP:

1. Less Control: Outsourcing IT means less direct control over the operations. You don't always get to pick the staff and have less ability to control service and quality.
2. Security Concerns: Requires trust in the MSP to manage sensitive data and systems securely. They have access to your proprietary and sensitive data (employees, customers, business strategy, etc).
3. Potential for Misaligned Goals: The MSP's goals may not always perfectly align with your business objectives. They are focused on their businesses success and not yours.

In-House IT Management:

1. Direct Control: Complete control over I.T. operations and decisions. You have hiring and firing authority, ability to control service levels and quality of service, and can pivot faster with an in-house team. Their objects are also directly aligned with the success of the business.
2. Customization: Easier to tailor IT operations to specific business needs. Complete organizational design is within your control with an internal I.T. team.
3. In-Person Support: Immediate support and quicker resolution of issues. Inhouse teams tend to be faster and more responsive than out-sourced teams.

Challenges with In-House IT:

1. Cost: High costs associated with hiring, training, and retaining IT staff. Need to be certain there is enough work for an in house person for each role.
2. Limited Expertise: Smaller teams may lack the specialized knowledge available with MSPs. If you bring on a database specialist in one system, it may be difficult to have them transition to a new technology like from SQL to no-SQL.
3. Resource Intensive: Requires significant investment in infrastructure and technology through both time and dollars. In house teams will require a full support infrastructure, leaders, HR, etc.

Ultimately, whether hiring an MSP or managing IT in-house is more advantageous depends on the specific needs, size, and capabilities of your business. Companies must weigh the cost, expertise, and scalability benefits of MSP's against the control and customization advantages of in-house management.

IT MSPs

Some of the most notable IT MSPs in the industry include:

• IBM Global Services: Offers a wide range of IT services, including cloud services, network services, process services, and technology support services.
• Tamaton Institute: Provides comprehensive IT services for boutique businesses that may not be big enough to need an IBM or Accenture size team.
• Accenture: Provides services like cloud, security, and application services, alongside digital transformation expertise.
• HCL Technologies: Offers services including digital and technology consulting, IT outsourcing, and next-gen services.
• Cognizant Technology Solutions: Specializes in IT services such as digital, technology, consulting, and operations services.