What is Outsourcing?

Outsourcing is the business practice of hiring a third party to perform services or create goods previously conducted in-house by the firm’s employees and staff. Outsourcing is a practice that is frequently used by businesses to save money. As a result, it has the potential to impact a wide variety of opportunities, from customer service to production to the back office.

Benefits of Outsourced IT

1. Monitoring

If you hire an in-house IT manager to manage your company’s IT, you are limited by office hours, sick days, weekend getaways, and workloads. However, when you outsource IT, you get around-the-clock surveillance and 24/7 crisis support that can only come from a company making it their business to ensure your IT has minimal downtime.

2. Increased Expertise 

Hiring an outsourced IT company that manages your IT has the added benefit of increasing your level of expertise. When you hire in-house, you are limited to the knowledge of a single person or a comparatively small team of people. While your IT manager will do their best to stay current on technological advances, it is difficult for any single IT mind to express an interest in everything IT-related. As a result, outsourced IT firms will have various experts on staff who know hardware, software, networks and servers, technical support, and other areas. Furthermore, outsourced IT firms make it a point to stay current with new tech, developments, potential threats, compliance factors, and further details.

3. Scalable Resources 

As a business owner, you understand the difficulty of finding the right person for the job, and all that job could entail in the present and the future. As your business expands, so will your IT requirements. Should you hire an IT team now to support your company through its anticipated growth stages, or should you hire only whatever you need now and expect to add more experience and workforce later?

Outsourcing IT can help you close the gap between where you are now and where you want to be. Your company’s outsourced IT package will include all of the experts you require at a fraction of the price of hiring a similar team in-house full-time. Furthermore, your outsourced IT team can develop with you, adding services and support as your business expands.

Average Cost of IT Outsourcing

There are several pricing models used by IT service providers, but the most common is the flat-rate, all-inclusive method of invoicing. IT firms that use this system typically charge between $110 and $165 per client per month. Managed IT and network operators, with more incorporated line-of-business applications and customer-facing applications, usually charge a higher fee. Keep in mind that you get what you pay for; a higher-priced managed service provider (MSP) is more likely to provide your company with the support and resources it requires to run efficiently.

Managed Service Provider Cost 

The cost of IT services is proportional to the provider’s level of operational maturity (OML). The price of an IT service provider reflects how well the business operates, and a provider promoting a low-cost fee is likely to provide limited services to the clients. A less expensive outsourced IT services provider frequently lacks the back-end processes required to ensure the operation’s stability and longevity. According to a Kaseya survey, organized IT service providers (MSP) with more expensive options grew faster. However, the value of an IT company is determined not solely by its cost but also by the provider’s confidence in the services it provides.

Budgeting for Outsourced IT Services 

Businesses frequently claim that there isn’t enough money in their financial plan to cover IT outsourcing. However, because of the costs associated with hiring a full-time, on-site IT person and the concealed downtime expenses that accumulate year-round, companies can reduce overall internal spending and possibly save money by outsourcing their IT department. Business downtime does not only refer to server crashes or router malfunctions but also to any period during which your technology negatively impacts your employees’ performance. When your employees are constrained by web and application loading times, printing delays, and document recreating, they are essentially wasting business time and money that can be used to create business growth and innovation. If your in-house IT person is on sick leave or vacation and cannot monitor your IT environment, or if they appear to lack the skills and resources of a managed IT services provider, your company is likely to suffer a loss. These costs can add up to or exceed the amount your company would splurge on managed IT services, and the savings rationalize investing in a managed service provider (MSP). Some IT service providers profit from the sale of third-party vendor technology and frequently cost more than the technologies and software are worth. To avoid being overcharged, compare the provider’s pricing to other technology vendors.

Conclusion

While outsourcing can benefit a company that prioritizes time over money, some drawbacks can occur if the company needs to retain control. Outsourcing the production of a simple item, such as clothing, carries far less risk than outsourcing the production of something complex, such as rocket fuel or financial modeling. Businesses considering outsourcing must carefully weigh the benefits and risks before proceeding.