“TechAisle reports that as of 2015, at least 40% of small businesses in the US will have had made the switch to an external IT management service.”
There are a lot of reasons why a company might want to outsource IT support. We hope that this article can serve as a template for those looking to build a business case for outsourcing IT services. We hope that these ideas help you to determine what is best for your business.
Setting the Stage
There are a few things that should be kept in mind as we discuss the business case for outsourcing IT services. This article is mainly directed at small and medium businesses from 10-150 employees. Businesses with less than 10 employees may not be mature enough or have enough need to take advantage of all the benefits of outsourced IT. Businesses that are larger than 150 employees get to a point where there is a good argument for hiring internal IT staff. The utility of outsourced IT can vary by the nature of your business and the complexity of your technology stack. Enterprise organizations can also benefit from Managed Services, but typically working in partnership with internal IT staff, and not as a standalone solution.
Understanding IT Support Needs
One of the first things to do when you’re considering what IT solution will be the best for your business is to understand the needs of your organization. How many users do you have? Are they working from the office, or do they work remotely? How critical are the IT systems you use to the function of your business? What kind of response times do you need? Taking the time to speak with your staff about common needs and consider the costs of downtime for your business is a great starting point.
It’s also important to remember that the 80-20 rule applies in IT support. The 80-20 rule maintains that 80% of outcomes (outputs) come from 20% of causes (inputs). 80% of the technical issues that a company faces are simple requests that can be handled by the help-desk quickly and easily. The other 20% of problems are server and network concerns that will typically have a greater impact on an organization than all those help-desk tickets. In IT support a help-desk technician, and a senior network engineer are two different job roles. You need to have a solution for both the simple help-desk requests and the more complex and impacting server network issues.
That same 80-20 rule applies in your business. 20% of the activities that you do to grow the business will yield 80% of the results. That means that you need to choose what you spend your time on very carefully. If IT isn’t one of the core competencies of your business and takes up valuable time that could be spent elsewhere, you might be better served by letting an expert tackle it.
“By delegating IT tasks to an external management service, business owners, along with their teams, are able to prioritize business-centered objectives like expansion, customer allocation & retention, recruitment, marketing and sales.” – Alvarez Technology Group
A managed service provider can provide you a level of consistent service that is hard to maintain with in-house IT staff. In addition, they will typically have a service level agreement which guarantees certain response and resolution times. Many internal IT departments do not have these. Outsourced IT support partners typically have a set escalation path for complex issues. This makes sure that the tough stuff gets to the right resource to solve the problem in a timely manner. All requests are tracked in a ticketing system so that nothing ever gets lost or forgotten. While it is possible for an internal IT department to implement such systems, it is not always done in small and medium businesses. Efficient IT solutions give your users a frustration free IT experience and allow them to get back to work quicker.
Having a yard stick that you can measure your results for in IT support is important. Outsourced IT partners allow you to have a LOT of information about your IT solution. They can report on your average response and resolution time, how many requests your organization is putting in, how long they take on average to resolve, trends in the tickets they are seeing and much more. The ability to measure results allows you to put solutions in place for continuous improvement. That will result in less downtime which saves your business time and money.
If you own a high growth or hyper growth small business being able to scale rapidly may be one of your requirements for your IT solutions. Outsourcing IT Services makes this simple. They have on demand resources that are at your fingertips. Just let them know about your growth and they can assign additional resources as needed. Staffing appropriately for IT in a rapidly growing company can be very difficult with internal IT staff. Outsourced solutions can grow with you at the speed of business which can give you an edge over the competition.
Reliability and Availability
All businesses want the same things from their IT systems. They want them to be ultra-reliable and always available. A good, outsourced partner can leverage all their technical resources and years of experience with other clients to your benefit. They’ve seen it all and know what works. That makes them uniquely qualified to recommend solutions that will be the most reliable for your business.
“Because their business is IT support, MSP’s bring a level of expertise and sophistication to IT management that simply cannot be duplicated by other, in-house solutions.”
Managing your costs is critical for every small business, and a big part of any decision. The good news is that part of the business case for outsourcing IT services is that for most small businesses it’s a cost SAVINGS. This comes from a lot of the advantages mentioned above.
The ability to focus your time on what matters most saves your business money. The capability to get quick efficiency solutions to IT problems so you can get back to work makes your staff more productive, which saves you money. Scalable solutions that allow your business to be agile and compete can make you money. Having a reliable network that is downtime free also saves you time and money.
Full time IT staff salaries for the help-desk position range from 45-60K per year. Add another 25% to that for benefits. If you want more senior IT staff that can tackle some of the larger server network issues that cost increases to 80-95K per year plus benefits. If you have a larger organization, you may need both. If you hire a help-desk technician to save money, you may still need to outsource some of the more complex server network issues that cause the greatest impact.
Add to these items the cost of IT tool set, training for that staff, licensing for backups and antivirus, and numerous other potential costs. That gives you an idea of the true cost of in-house IT staff.
For companies that are 150 employees or less an outsourced provider can provide a full IT solution including tool set, licensing, and more for a fraction of what you would pay for full time staff. It’s not uncommon for business to save up to 50% while receiving a more complete solution.
We hope this has been helpful for anyone that is investigating creating a business case for outsourcing IT services. Over the years i.t.NOW has partnered with hundreds of businesses to provide high quality IT solutions that meet their needs and their budget. If you find yourself looking for a reliable partner that can help your business, we would love to talk. Give us a call today.