Insourcing vs Outsourcing IT Services: What’s Best?

When it comes to sourcing the right IT help for your business in 2024, you may find yourself stuck between hiring an in-house IT professional, adding to your existing IT team, or outsourcing to a managed IT service provider. 

This blog will help guide you through these approaches, how they work, and their definitive pros and cons in the current IT landscape.

With the rapid evolution of technology and the increasing complexity of IT systems, deciding which approach will best meet your small business goals may seem challenging.

However, understanding the current trends in IT sourcing can provide valuable insights. For instance, 81% of companies outsource their cybersecurity functions to external service providers, and 57% of companies outsource for cost reduction purposes and to fill talent gaps. On the other hand, 24.1% prefer to perform key IT functions in-house. 

What's in this article?

Which is the right fit for your unique needs? Insourcing? Outsourcing? Or a hybrid approach?

Understanding the difference will put you in a much better position to make the right decision for your small business.

What Is Insourcing?

In an IT scenario, "insourcing" means hiring dedicated IT staff to perform work in-house. In most cases, a small business owner will either:

A) hire a specialist(s) with specific core competencies in areas such as cybersecurity, cloud computing, or data analytics

OR

B) train an existing employee to oversee the organization's essential IT functions, including managing software updates, troubleshooting hardware issues, and ensuring network security

Simply put, an insourced team keeps your IT "inside" the business, working as a direct employee or group.

While this approach allows for direct control and quick communication, it can have unseen effects in the long term, especially when your business starts to grow and IT needs become more complex.

Here are some things to consider about the insourcing approach:

Insourcing Pros:

•  Direct control over IT operations
•  In-house team becomes very familiar with your business in the long term
•  Potential cost savings in management expenses
• Quick and easy communication

Insourcing Cons:

•  Can be expensive compared to outsourcing due to salaries, benefits, and training costs
•  More time-consuming as you need to manage the IT team in addition to your core business operations
•  May lack the wide range of expertise that an outsourced IT team can provide
•  Finding the "right" employee with the necessary skills and experience may prove challenging
  

What Is Outsourcing?

IT outsourcing is when a small business opts to turn to a third party (in this case, a managed IT service provider) to take charge of some or all IT-related tasks or support services.

The IT support tasks could range from basic network monitoring and security services to maintaining your hardware and software, to more complex tasks such as implementing and managing cloud solutions, data analytics, and cybersecurity measures.

You can also choose to outsource 100% of your IT tasks, full-time. In these cases, the outsourced team operates as your IT department or strategic partner, freeing you to focus on your core business operations.

So, what are the benefits of outsourcing in today's IT landscape?

Outsourcing Pros:

•  Predictable costs via a fixed or flat-rate fee
•  Rapid, round-the-clock response times (24/7/365)
•  Easily scalable as your business grows
•  Strategic planning for long-term growth and digital transformation
•  Reduced downtime, increased productivity
•  Accountability - they train staff and get to know your small business
•  Reduced overhead costs, reduced risk

Outsourcing Cons:

•  Few to no in-house onsite IT staff - this can be negotiated with some MSPs
•  Takes time for your MSP to "learn" your business and understand its unique IT needs
•  The potential for partial or total infrastructure upgrades (these are sometimes required to make your business "supportable")
•  May be higher management costs, in some cases
  
  
  

Which is Best For Small Businesses?

Choosing to work with a managed IT service provider doesn't have to be an "all or nothing" decision.

As a business owner, you may opt to insource certain IT functions and outsource others to serve your specific IT needs better.

However, the full IT outsourcing model is often a better choice for many small and medium businesses, especially those that lack the resources to maintain an in-house IT team. It provides affordable, reliable access to a wide range of IT resources and expertise. 

Plus, it frees them from the frustration of researching, installing, and upgrading technology.

Often, we see businesses that employ a mix of both, or sometimes all the way to either end of the spectrum or the other. In truth, there is no single, silver bullet IT option for every business owner to pick from.

Take some time to map out your goals and discuss how IT is involved in achieving them. Typically, when we have these discussions with clients, the choice between insourcing or outsourcing IT becomes clearer. Remember, the best choice is the one that aligns with your business goals and resources. 

It All Starts With a Conversation...

Unsure whether outsourcing your IT is the right move for your small business? Discover how managed IT services can benefit you by reading our blog or reaching out to learn more about our comprehensive IT solutions.

At GAM Tech, we're dedicated to helping your organization achieve its unique goals. Let's have a chat with no hidden motives, no obligations, just honest insights on how we can support your business. Contact us today to get started!