Managed Services Companies vs. In-House IT: Which Is Right for Your Business?
As technology becomes increasingly vital to businesses, the need for IT support grows. Businesses have the option to either hire an in-house IT team or work with a managed services company. In this article, we will provide a comprehensive comparison of the two options to help businesses make informed decisions.
Managed Services Explained
Managed services refer to the practice of outsourcing IT operations to an external provider who manages and assumes responsibility for specific IT functions. Managed services can include a wide range of IT operations, such as network and infrastructure management, security, data backup and recovery, cloud services, and help desk support for specific business management applications.
Managed Service Models
Managed services providers (MSPs) work closely with their clients to understand their business needs and develop customized solutions that meet their specific requirements. MSPs offer a range of service models, including:
Monitoring and Maintenance
Under the monitoring and maintenance service model, the MSP takes on the responsibility of monitoring the client’s IT systems and infrastructure on an ongoing basis. This includes identifying and addressing potential issues before they escalate into major problems that can impact the business. MSPs utilize a range of tools and software to proactively monitor systems and can often identify and address issues before clients are even aware of them.
In addition to monitoring, MSPs also provide regular maintenance and updates to ensure that systems are running smoothly and securely. This can include software updates, security patches, and hardware maintenance. By providing ongoing monitoring and maintenance, MSPs can help businesses reduce downtime and improve the reliability of their IT systems.
Fully Managed Services
The fully managed services model provides clients with a comprehensive IT solution, where the MSP takes on the responsibility for managing all aspects of their technology infrastructure. This includes hardware, software, networks, and security. MSPs typically work closely with clients to understand their specific needs and develop a customized IT strategy to meet those needs.
Under this model, the MSP takes on the responsibility of managing all aspects of the client’s IT environment. This can include purchasing and deploying hardware and software, managing networks and servers, providing user support and training, and managing security and compliance. By assuming full responsibility for IT operations, MSPs can help businesses reduce costs, improve efficiency, and minimize risk.
Ad Hoc Services
Ad Hoc services allow clients to choose the specific IT services they need, such as help desk support, cloud services, or security management. This model allows businesses to customize their IT solutions to meet their specific needs and budget. Clients can select the services they need on a per-project or ongoing basis, giving them greater flexibility and control over their IT environment.
By choosing Ad Hoc services, businesses can focus on their core competencies while outsourcing non-core IT functions to a specialized provider. This can help businesses reduce costs, improve efficiency, and improve the quality of their IT operations.
Read Our Article: Key Benefits of Holistic Managed Services for Your Business
Comparing the Cost of In House IT Team vs Managed Services Providers
When it comes to managing their IT needs, businesses must consider the costs associated with different options, including hiring an in-house IT team or working with a managed services company. Both options come with various costs and benefits, and understanding these factors is crucial in making an informed decision that meets a business’s specific needs and budget.
In-House IT Costs
Hiring and managing an in-house IT team comes with significant costs. According to data from Glassdoor, the average salary for an IT manager in the United States is around $100,000 per year. This figure doesn’t include additional costs such as benefits, training, equipment, and ongoing maintenance. When factoring in all these costs, the total cost of an in-house IT team can be quite significant.
Managed Services Company Costs
Working with a managed services company also comes with costs, such as monthly fees and contractual obligations. However, this cost is often less expensive than hiring an in-house team and may provide better value for money. For example, a managed services company may be able to provide a higher level of expertise and 24/7 support for a lower cost than an in-house team.
According to Jermaine Jackson, Managing Partner at Zanovoy “By working with a managed services company, businesses can access a higher level of expertise and support without having to incur the costs of hiring and managing an in-house team. This can result in significant cost savings over time.”
Cost Breakdown Example
|Cost Category||In-House IT Costs||Managed Services Company Costs|
|Salaries||Average IT Manager salary in the US is $100,000 per year (Glassdoor)||Monthly fees and contractual obligations|
|Benefits||Healthcare, retirement plans, etc.||N/A|
|Training||Initial and ongoing training costs||N/A|
|Equipment||Hardware, software, and infrastructure costs||N/A|
|Ongoing Maintenance||Costs for repairs, updates, and maintenance||N/A|
Don’t Forget the Cost of Mistakes
Mistakes in IT support can be costly, regardless of whether a business is working with an in-house team or a managed services company. However, the cost of mistakes may be higher with an in-house team, as businesses may face the cost of errors, delays, and other issues. With a managed services company, businesses may have to pay additional fees for correcting mistakes, but the overall cost may still be lower than if they were to rely on an in-house team.
Expertise and Quality
Managing a company’s IT infrastructure requires a high level of expertise and quality to ensure smooth operations and mitigate potential risks. When deciding between relying on an in-house IT team or partnering with a managed services company, another crucial factor to consider is the expertise and quality that each option offers. In-house IT teams provide businesses with a deep understanding of their unique systems and infrastructure, while managed services companies have specialized expertise across a wide range of technologies.
In-House IT Expertise and Quality
In-house IT teams have the advantage of having intimate knowledge of a company’s systems and infrastructure. They can work closely with other departments and stakeholders to understand the unique needs and challenges of the business.
However, they may lack the specialization and expertise of a managed services company. In-house IT teams may not have the same level of training or resources available to them as a managed services company, limiting their ability to provide specialized support in certain areas.
This is especially true when businesses are needing support for specific software applications. Depending on your team’s experience, you may find yourself in a situation where they are unable to solve problems that impact your team’s workflows, and day to day use of these software packages can have significant impacts on productivity.
Managed Services Company Expertise and Quality
Managed services companies have teams of experts with specialized knowledge in various areas. They can provide high-quality support across a wide range of technologies, including software, hardware, networks, and security. Managed services companies often have a broader range of resources and tools available to them, allowing them to provide more advanced and specialized services than an in-house IT team.
According to Jermaine Jackson, “Managed services companies can provide businesses with a level of expertise and support that is difficult to match with an in-house team. By working with a managed services company, businesses can access a team of experts with specialized knowledge in a variety of areas, providing them with the support they need to keep their IT systems running smoothly.”
Quality of Work
The quality of work from a managed services company may be more consistent and reliable than an in-house team due to their specialized knowledge and training. Managed services companies often have strict service level agreements (SLAs) in place, ensuring that their response times and resolution times are consistently met.
In-house IT teams may not have access to the same level of resources or training as managed services companies. This can result in longer resolution times, which can lead to more downtime for the business. Additionally, relying on a small, internal team can expose businesses to risks such as key personnel leaving and taking their knowledge with them. This can lead to a significant loss of institutional knowledge and expertise, which can be difficult and costly to replace.
Flexibility and Scalability
Another key comparison to consider in this decision is the flexibility and scalability of these two options. Both in-house teams and managed services companies have their own strengths and limitations when it comes to adapting to changing business needs and demands. Understanding these factors is essential in making an informed decision that meets a business’s specific needs and requirements.
In-House IT Flexibility and Scalability
In-house IT teams may have more flexibility to adapt to changing business needs and demands. They can work closely with other departments to understand the specific needs and challenges of the business and develop customized solutions that meet those needs. However, they may also be limited by the size of the team and the available resources. In-house teams may not have the capacity to take on larger projects or handle sudden spikes in demand.
Managed Services Company Flexibility and Scalability
Managed services companies have teams of experts who can quickly adapt to changes in demand and provide services that meet changing business needs. They have the ability to scale their services up or down as needed, providing businesses with the flexibility to respond to changing circumstances. Managed services companies can also provide businesses with access to specialized expertise and resources that may not be available internally.
Risk and Liability
Managing a company’s IT infrastructure comes with inherent risks, and it’s essential to understand the specific risk profiles associated with relying on an in-house IT team or partnering with a managed services company. Depending on a business’s operations, the type of data it handles, and other factors, the risks and potential liabilities associated with managing its technology infrastructure can vary significantly.
In-House IT Risk and Liability
One of the most significant risks associated with relying on an in-house IT team is the potential for being in a situation where you have insufficient expertise and resources to handle complex IT issues. This could lead to errors and system failures that can significantly impact a business’s operations. Additionally, in-house IT teams may be subject to internal conflicts, personal biases, or limited capacity, leading to suboptimal solutions or delayed problem resolution.
Managed Services Company Risk and Liability
Working with a managed services company also presents specific risks and liabilities, particularly related to data security, vendor management, and contractual issues. For example, if a managed services company experiences a data breach while handling a client’s data, the client could face significant legal and financial consequences. Additionally, a managed services company may struggle to manage and oversee multiple vendors and subcontractors, leading to delays and other issues that can impact a business’s operations.
To mitigate risks and liabilities associated with managing IT infrastructure, both in-house IT teams and managed services companies can implement various security measures and contingency plans. These measures may include regular data backups, implementing firewalls and other security protocols, and creating disaster recovery plans. Additionally, businesses should work with their IT teams or managed services companies to establish clear policies and procedures to reduce the risk of potential liability issues.
Download Our Managed Services Guide to Discover How You Can Save Time and Money by Partnering with Zanovoy
Discover the profound impact of partnering with a single managed services provider across all software platforms, including ERP, spend management, and advanced point solutions. Experience the expertise and efficiency that comes from consolidating your technology needs under one trusted umbrella. Unleash streamlined processes, enhanced data accuracy, and significant cost savings.
It’s Time to Decide
As technology becomes more important to businesses, the need for IT support increases. Companies have two options to meet their IT needs: hire an in-house IT team or work with a managed services company. In this article, we provided a detailed comparison of both options, considering various factors such as managed service models, expertise and quality, costs, flexibility and scalability, and risks and liabilities.
While in-house IT teams may provide a deeper understanding of a company’s systems and infrastructure, managed services companies offer specialized expertise in various areas and can provide comprehensive IT solutions. In-house IT teams may have more flexibility to adapt to changing business needs, but managed services companies can scale services up or down to meet those changes.
Managing IT infrastructure comes with risks, and it’s essential to understand the specific risk profiles associated with each option. In-house IT teams face the risk of insufficient expertise and resources, while managed services companies face data security and contractual issues. Mitigating these risks and liabilities requires implementing security measures and contingency plans, such as regular data backups and disaster recovery plans.
In conclusion, businesses must consider several factors when deciding between an in-house IT team and a managed services company. Depending on a company’s unique needs, one option may be more suitable than the other. By understanding the differences between the two options, companies can make informed decisions that meet their IT needs, reduce costs, and minimize risks.
Leave a ReplyWant to join the discussion?
Feel free to contribute!