Outsourcing IT vs in-house IT: A comprehensive comparison

Technology is at the heart of most organisations. From improving operational efficiency to enhancing customer experiences, companies rely on IT systems to drive growth, innovation, and competitive advantage. As businesses navigate their technology needs, they decide whether to build and manage an in-house IT department or outsource their IT functions to third-party providers. Each approach has its own set of challenges that need to be carefully considered.

This article explores the key differences, benefits, and potential drawbacks of outsourcing IT vs in-house IT.

Table of contents

• What is IT outsourcing and how does it work?
• What is in-house IT and how does it work?
• Key factors to consider when choosing between outsourced IT or in-house IT
• Summary

What is IT outsourcing and how does it work?

IT outsourcing involves partnering with external vendors to manage, support, and maintain your technology infrastructure, systems, and devices. These third-party providers can offer various solutions, including managed IT services, cloud computing, cyber security, networking, communications, and help desk support. Typically, outsourcing contracts involve Service Level Agreements (SLAs) that outline the scope of services, performance metrics, and response times.

What is in-house IT support and how does it work?

In-house IT support is an individual or dedicated team who are employed directly by your company to handle all your IT needs. They’re responsible for a wide range of activities, such as installing and configuring hardware, troubleshooting issues, implementing cyber security measures, and providing technical support.

Key factors to consider when choosing between outsourced IT or in-house IT

1. Cost

One of the most important factors when deciding between outsourcing IT or managing it in-house is cost.

Outsourcing IT costs

Outsourced IT providers are cost-effective partners for all your IT needs. Outsourcing IT typically allows companies to lower upfront costs associated with infrastructure, hiring, and training. Instead of investing in expensive hardware, software, and personnel, businesses can pay a fixed monthly fee to the IT service provider. This predictable cost structure can be more manageable for companies that want to avoid large, one-time expenses. The fixed cost also includes maintenance and support, ensuring your equipment is always operating at peak performance.

Additionally, outsourced IT providers cultivate strong relationships with hardware and software vendors. These established relationships often give them access to special pricing or bulk discounts unavailable to individual clients. This enables them to purchase products at a lower cost, passing on the savings to their clients to reduce the overall cost. As a result, businesses benefit from high-quality solutions at reduced prices, without sacrificing performance or reliability.

At ITVET, we provide flexible outsourced IT support contracts tailored to the specific goals and needs of your business. These can easily be scaled up or down depending on your needs. For instance, a company can increase its IT capacity during periods of high demand, such as seasonal surges, without having to permanently hire additional employees or purchase additional infrastructure.

In-house IT costs

Building an in-house IT team involves a hefty upfront investment. Companies must purchase hardware, software, and other technology resources. They also need to hire qualified IT professionals and provide them with ongoing training and development opportunities. This includes the cost of salaries, benefits, recruitment, and retention.

Having an in-house team is more expensive, but some companies might prefer it if they’re using highly specialised or proprietary technology systems.

2. Control and customisation

Outsourcing control

One of the primary concerns about outsourcing IT is the potential loss of control. When businesses outsource IT functions, they rely on third-party providers to make decisions, manage projects, and handle incidents. This lack of direct oversight can lead to delays, miscommunications, and challenges when customisation is required.

Outsourcing IT service providers often provide standardised solutions that may not always align with the unique needs of the organisation. While these solutions can be efficient and cost-effective, they may not always allow for the level of customisation that in-house teams can provide.

ITVET is not your typical IT firm. We may be a third-party vendor, but we work as part of your team. You’ll have a dedicated Client Relationship Manager (CRM) who will work closely with you and get to know your business inside and out. They’ll bring a wealth of experience and expertise, ensuring you receive informed advice tailored to your specific industry and goals.

In-house control

With an in-house IT team, organisations maintain complete control over their technology strategy, decision-making, and operations. In-house teams can tailor solutions to meet specific business needs and goals, quickly address issues as they arise, and ensure alignment with the organisation’s broader objectives.

However, this control comes at a cost. Managing an in-house team requires continuous oversight and the coordination of resources across various departments. Companies also need to ensure that their IT employees stay up to date with the latest technology trends and innovations.

3. Expertise and skill sets

Outsourcing expertise

Outsourcing IT gives businesses access to a wide range of specialised expertise that may not be available within their organisation. Many IT service providers employ experts in various fields, including cyber security, cloud computing, and networking. This can be especially beneficial for small to mid-sized companies that can’t afford to hire specialists for every IT function.

By utilising the expertise of external providers, organisations can benefit from best practices, the latest technologies, and insights from professionals with experience across various industries and businesses. This expertise enhances your ability to innovate and adopt new technologies that improve efficiency and customer experience.

In-house expertise

In-house teams may possess deep knowledge of your operations, but staying up to date on emerging technologies requires significant investment.

Building a high-performing in-house IT team with diverse expertise requires careful recruitment, training, and development. However, the cost of hiring and retaining top-tier IT talent can be prohibitive, particularly for smaller companies. Moreover, the current skills shortage makes it challenging for businesses to recruit and fill specialist roles.

4. Security and risk management

Outsourcing security risks

Outsourcing IT functions, especially when dealing with sensitive data and systems, can raise concerns about data security and privacy. When organisations work with third-party providers, they may expose themselves to risks such as data breaches, cyberattacks, or compliance issues if the provider does not adhere to strict security standards.

At ITVET, cyber security is a priority so you can rest assured that your data is in safe hands with us. We adhere to the highest security standards including ISO 27001 and Cyber Essentials. Our experienced team combines proactive monitoring, cutting-edge technology, and a commitment to excellence to keep your business secure and thriving.

In-house security control

An in-house IT team offers greater control over security and risk management. Organisations can implement security protocols tailored to their specific needs and ensure that employees follow best practices. In-house teams can quickly respond to security threats, monitor internal systems, and ensure that sensitive data is protected.

However, in-house teams may face challenges in staying ahead of rapidly evolving cyber security threats. Companies must continually invest in training, technology, and resources to address new and emerging risks.

5. Scalability and flexibility

Outsourcing scalability

One of the key advantages of outsourcing IT is scalability. Outsourced IT providers typically offer flexible service models that allow businesses to easily scale their IT functions based on growth or changing needs. They’re equipped with the resources and expertise to handle large-scale projects or quickly adjust to meet sudden shifts in demand.

In-house scalability

Scaling an in-house IT department can be more challenging and costly. Businesses need to hire additional personnel, procure new hardware, and invest in infrastructure. This can be particularly difficult for smaller organisations that may not have the financial or operational flexibility to quickly adapt to changing circumstances.

In-house teams may also face limitations in terms of expertise. If a company needs to quickly deploy a new technology or service, it may not have the necessary internal resources to do so efficiently. This is particularly true when specialised skills are required.

6. Response time and service quality

Outsourcing response time

Outsourcing IT can sometimes lead to potential delays in response time. IT service providers often have multiple clients, and their ability to prioritise requests may depend on the terms outlined in the service agreement. In cases where an on-site visit is required, response times will be slower than an in-house team already based on the premises.

However, many IT service providers offer 24/7 support, which in-house teams may struggle to provide. This is a major advantage for businesses, such as hotels and shopping centres, that require out-of-hours support, especially for critical systems that must always remain operational.

At ITVET, we pride ourselves on our rapid response rate and resolution times. Our service desk team is made up of seriously passionate tech enthusiasts with skills that are next level. Additionally, our SLAs ensure that your IT issues are resolved quickly and effectively to minimise downtime and disruption to your business.

“The ITVET service desk response time is amazing! I requested two separate things in a very short span, and I am amazed by the quick response and action.”
JLL Property & Investment Services
Company Representative

In-house response time

In-house IT teams can typically respond more quickly to internal issues and provide a more personalised service. When problems arise, employees can communicate face-to-face with the IT team who are familiar with the organisation’s systems and priorities. This level of responsiveness can improve operational efficiency and minimise downtime. However, response times may be slower if the IT department is understaffed or lacks specialised expertise, depending on the size of the team and the complexity of the issue.

Summary

Outsourcing IT pros

• Lower upfront costs.
• Fixed monthly cost.
• Access to a wide range of specialised expertise.
• Flexibility to scale up or down.
• 24/7 IT support.

Outsourcing IT cons

• Standardised solutions.
• Less control.
• Data privacy and security concerns.
• Longer response rates (in some cases).

In-house IT pros

• Deeper knowledge of the company.
• More control.
• Greater control over security and risk management.
• Quicker to respond to IT issues (in some cases).

In-house IT cons

• Requires significant upfront investment.
• Keeping up with emerging technologies and trends can be challenging.
• Skills shortage for specialist roles.
• Scaling an in-house IT department can be costly.
• Difficult to stay ahead of rapidly evolving cyber security threats.
• IT support usually covers business hours only.

Conclusion

Both outsourced IT and in-house IT offer distinct advantages and challenges. Managing IT in-house offers greater control over systems, as well as the ability to tailor solutions to meet specific business needs. However, it requires significant investment in infrastructure, talent, and ongoing training.

On the other hand, outsourced IT is a cost-effective solution that gives businesses access to specialised expertise, scalable resources, and 24/7 support. However, it can come with risks related to security, control, and customisation – but these can be avoided with the right provider. AT ITVET, we don’t do generic support packages – everything is tailored to your specific industry and goals with cyber security always at the core.

The decision between outsourcing IT and managing IT in-house ultimately depends on the size, budget, and specific needs of the organisation. And it doesn’t necessarily need to be a case of outsourcing IT vs in-house IT. You can opt for a hybrid approach that blends outsourced IT services with an in-house team. This offers the best of both worlds, providing flexibility, expertise, and control as the company grows and evolves.

If you decide outsourcing IT is the best approach for your business or you’d like to enhance your in-house team, we’re here to help. To find out more information about our outsourced IT services book a free consultation today.