Make the Smart Choice: MSP or In-House IT?
One of the dirty little secrets and universal truths of business ownership comes down to this: infrastructure is everything.. As the business world becomes increasingly reliant on technology, it is more critical than ever to have a safe and effective IT solution. There’s also the pressing issue of cybercrime. With cyber attacks and security breaches on the rise, proper IT management can mean the difference between saving and losing your business.
There are a lot of different IT management options on the market. How can you know which one is the right model for your business? Today we’re breaking down a key question facing businesses looking for IT solutions: MSP or In-house IT? Simply put, is it better to work with an external Managed Services Provider (MSP) or hire a dedicated in-house IT team?
As businesses grow and mature, so do their IT needs and challenges. To shed a bit more light on this subject, let’s look at the IT life cycle of a business in more detail:
1: Early Stages
So you’ve started a business: congratulations! Perhaps you have a small office, or perhaps you’ve simply got your laptop in the garage. Either way, you’re a business owner and you now have IT needs you didn’t have before. You’ve begun to need things like a good email platform, a website, and tax software. In the early stages of your business, you are probably using the free versions of services, such as Gmail and Dropbox. This is fine for now but, as your business grows, your needs will expand.
As your business matures, you bring on a few employees to join your team. When something goes wrong, you likely hire a tech-savvy friend or cheap hourly technician to fix it. This is the start of the trouble: when you only call someone in after a problem has occurred, you are taking a reactive rather than a proactive approach to IT.
2: Expanding the Organization and Growing the Team
Now you’re really taking off! Perhaps you have 8-10 employees at this point in your business’ lifecycle. It’s great to have the extra help, but more technology users means more IT issues. Even if each employee has only 1 IT issue per month, that’s 10 IT issues total. You will begin to notice that these IT problems are distracting you and your staff from the core tasks of the business. At this point, you can engage the services of an IT company to help alleviate the burden from your staff.
The IT company can also help you with more sophisticated business needs, such as antivirus software and backup.
3: Scaling Up to the Middle Market
Your team and business is continuing to expand. Now, your growth may be outpacing what the small IT company can do for you. You are also likely interested in more complex IT services, such as migration to the cloud, replacing equipment, and cybersecurity. Here, it is best to evolve to a larger MSP, who can address your growing IT needs. This MSP will proactively monitor your IT environment to stop problems before they occur.
4: A Mature Business
Business is booming and you have a team of 100+ employees! What an achievement! However, you may be looking at your budget and feeling concerned about the amount you are spending on Managed Services. Now you have arrived at our key question: is it cheaper or more effective to simply hire an in-house IT team of my own?
Let’s run two scenarios to help us settle this question once and for all.
Option 1: In-House IT
In this model, you decide to bring on a dedicated IT manager for your business. One employee salary seems far cheaper than what you’ve been spending on the MSP, right? Maybe so, but now you’ve got a whole new host of challenges to contend with.
First of all, don’t think you can get away with hiring just anyone. If you hire someone with less experience at a lower salary in order to cut costs, they can become a liability. They may not have the knowledge and experience to manage IT at the scale needed for your business. In fact, most businesses of 100+ employees actually require 2-4 dedicated staff members in order to run IT adequately. If you think hiring an in-house IT manager will be more effective than an MSP, you are likely underestimating the amount of IT work that is being done for your business.
If you’re really serious about in-house IT, it is wise to hire a high-quality and experienced IT leader. This person will not be inexpensive or easy to find, but will be capable of directing your IT team safely and effectively. Beneath that person you will need engineers, junior system admins, and helpdesk staff, all requiring their own salaries.
Even if you find those ideal candidates, you must still worry about employee turnover. If your IT manager decides to leave, you will have to hire someone new and spend time and money re-training them. Sick days, time off, and vacation days can also become a liability. If something goes wrong and your IT leader is out of the office, you could lose countless hours of productivity or even become vulnerable to cybercrime.
There are some benefits to in-house IT. Firstly, your employees work only for you. They have no other clients and can dedicate 100% of their time and energy to your business. If something goes wrong, you can simply walk across the office, rather than having to get in touch with your MSP remotely. You also have the benefit of added control. With an in-house IT team, it is easier to know exactly what your team is up to and direct their efforts accordingly.
- Make quality hires, not cheap ones
- Poorly trained or under-qualified employees can become a liability
- Most businesses of 100+ actually require an IT team of 2-4 dedicated people
- Benefits: more control, closer proximity to your IT team
- Between salaries, benefits, and employee turnover, in-house IT is often the more expensive option
Option 2: MSP
In this model, you continue to use the services of a larger-sized MSP. The price tag may seem high, but it comes with a wide variety of benefits that an in-house IT team cannot provide.
As opposed to an in-house IT team of 2-4 people, a larger MSP likely has 100+ employees, all of whom you have access to as a client. Their processes and services are more expensive, but they are also more sophisticated. An MSP is capable of handling many tickets per day without becoming overwhelmed.
This team likely includes specialists and experts, who are specifically trained to handle the unique needs of your business. For example, if you use cisco phones, the MSP will have cisco specialists (CCNA, CCIE) on hand to help you with your phone system.
MSPs also operate 24/7. If something goes wrong in the middle of the night, their proactive monitoring will let them know. Then, they can jump in and fix the problem right away. Having in-house staff working 24/7 requires complicated shift scheduling and costly overtime pay.
With an MSP, you do not have to worry about employee turnover or vacation days. If someone leaves or goes on vacation, the MSP has more than enough team members to cover the slack.
Though it is true that you will not be an MSP’s only client, the MSP can provide you with a dedicated account manager, VCIO, or VCTO for whom you will be the main priority.
When you work with an MSP, the MSP takes on liability. If something goes wrong, the burden does not fall to you and your staff.
- An MSP protects you 24/7, not just 9-5
- The MSP approach is proactive, not reactive
- No need to worry about employee turnover. An MSP’s staff is large enough to cover the slack.
- An MSP provides you with access to specialists and trained experts
- With an MSP, you will often save $$ in the long run
After examining these two scenarios, the choice is clear: working with an MSP is the safer, more effective, and cheaper option for businesses. If you still feel strongly about some in-house IT presence, you can implement a hybrid model, in which your dedicated staff members work in tandem with the MSP. Either way, the proactive approach of an MSP cannot be beaten in terms of the health and security of your business.
If you’re looking for a great MSP partner, you can request a free quote from us here, or contact us directly.. We know you want what’s best for your business. With our years of experience, team of experts, and round-the-clock support, we are here to serve you.