In-House or Outsourced IT: Which Is Best for Your Business?

outsourced it

Growing a Connecticut small business is not easy, especially in a post-recession economy. Every decision that business owners make needs to keep in mind a return on investment or savings in overhead.

For small-business owners, the decision to outsource their information technology needs as opposed to having someone in house do the work is an important one. Assessing IT overhead is more than calculating the expenses for headcount and hardware. The decision needs to be based on both operational costs and potential losses in the event of an IT disaster.

For most small businesses, IT is not their core function but is something necessary to make the business run. Business owners want IT to work for them but not become a cost and time suck that can take away from the company’s primary objectives.

Consider the example of Bozzuto’s Retail Technology Services (RTS) located in Cheshire, Connecticut. RTS runs on technology, providing business-critical staffing and stocking solutions for grocery and specialty stores. Its technology expertise is dedicated to providing networking solutions to help client companies manage their stores. In fact, many of the company’s customers run their businesses on RTS’s data and services, so if RTS has an IT issue, it can affect its entire customer base.

RTS’s IT team is focused on providing superior data management services to the company’s grocery customers, which is a better use of IT time, because it is directly tied to company profits. However, RTS also needs to manage its own network systems to ensure that it provides reliable services. Rather than having its own staff take valuable IT time to handle in-house maintenance, it outsources routine tasks. Outsourcing data backup services to NSI, for example, ensures that RTS has business continuity. For example, when an RTS server did fail, NSI was able to use its expertise to get it back online in 15 minutes with minimal disruption to operations.

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RTS is typical of Connecticut small businesses that need to balance allocation of in-house resources with the cost-effectiveness of outsourcing IT tasks. Before you decide whether to use outsourced IT or stay in house, here are some key considerations:

Downtime

Most small businesses can't afford a dedicated full-time employee to focus solely on technology. Even if they could, employees will want benefits such as vacation time, sick leave, training, and other job perks that will pull them from the office.

As Murphy’s Law states, anything that can go wrong will go wrong. What if your network fails while your tech guy is home sick? What if the printer stops printing an hour before a big meeting and your tech guy is visiting the in-laws?

This is not an issue with an outsourced IT provider that will be on call at all times. While a person will not reside permanently in your office, a good outsourced IT provider will be so responsive that it will feel like a member of the team and be able to solve problems more quickly than someone sitting in the office.

Institutional Knowledge

At first, it may seem like having an insourced IT professional would lead to more institutional knowledge, but in fact the opposite is true. With small businesses likely to only hire one technology-focused employee, any institutional knowledge will leave with them when they leave the company. This can cause a new person to come in and start from scratch or with little input from his or her predecessor.

Now, if your company decides to go with an outsourced partner, that provider can then become an expert in your company’s technology needs. It will have records of what technology your company uses, when it's been updated, and what is working best. A good outsourced provider will also work proactively to ensure that the technology always works to eliminate service calls if there is a fixed-price contract.

Technology Expertise

Your company will use technology for a wide range of functions from email and timekeeping to payroll and billing, not to mention the everyday things to keep the business operating like printing, network connectivity, and security.

An in-house technician may have an idea of the best products for the company, but that will only be a small slice of knowledge. An outsourced IT provider will likely have several other clients and will have worked with a wide range of technologies.

This is important because the provider will be able to alert you to emerging technologies that may help your business. It will also know what a fair price is for some services and where a company can save with IT and where it should invest.

This portfolio of knowledge is key. Outsourced IT providers are on the pulse of technological innovation and will be able to make sure your company is, too. IT is not just making sure the company Wi-Fi works (although that is important) but helping a company set itself up to better serve its customers, eliminate employee downtime, and continue to grow.

Creating Revenue from Outsourcing

Once you see the advantages of outsourcing, the question becomes “Where do I focus?” That may be the wrong question. There are specific areas where your company can save from outsourced services, such as systems monitoring and backup, but smart organizations see the real growth potential from outsourcing. IT is a more strategic resource that keeps Connecticut companies ahead of their competition.

Technology changes faster than companies can afford to upgrade, so inevitably they are continually playing catch-up with the latest hardware, software, and services. Outsourcing allows companies to stay current with the latest technology without significant investment. More small and medium-sized businesses and enterprises are embracing cloud services, causing analysts to become even more optimistic about the boom in cloud adoption. Smart executives are starting to view outsourcing partners as more of a strategic resource rather than just a tactical solution to IT issues, because IT services make companies more agile and efficient in a way that enables business transformation.

Rather than shopping for the lowest cost in service providers, CIOs are recognizing the increased value in partnering with the right managed services partners. The right technology partner can provide outsourced services that can transform the company, and because the infrastructure is outsourced as well, adapting to changing market conditions is much easier and less costly.

That’s why it’s essential to find a knowledgeable partner with a depth of technology expertise and an understanding of your business. Outsourcing IT can be a true asset, giving your company a competitive advantage by providing access to new technologies and cloud services that promote growth and agility without committing to additional IT overhead or infrastructure.

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About The Author

President of NSI, Tom has been helping small and medium businesses succeed in Connecticut for over 25 years.