Top 5 Pros and Cons of Outsourcing IT Services

In today’s business world, it’s rare to find tasks that don’t require the use of a computer, tablet, or smartphone. This means that delighting your clients and keeping your employees productive depends heavily on the efficiency and competency of your company’s information technology (IT) department and its processes.

The IT department’s role has changed dramatically in the past 10 years due to the advancement of technology and the prevalence of cyber threats impacting businesses. It’s a big job and more complex than ever before.

That’s why businesses are increasingly choosing to outsource some or all of their IT operations to third-party providers who specialize in this, commonly referred to as managed IT services providers (MSPs).

The quality and specific services offered by MSPs vary, but this type of arrangement generally results in lower overall technology costs, reduced risks, and happier employees.

Like most business decisions, there are pros and cons.

How do you know if outsourcing IT services is right for you? Let’s dig in.

• What Are the Pros of Outsourcing IT Services?
• What Are the Cons of Outsourcing IT Services?

What Are the Pros of Outsourcing IT Services to a Managed IT Services Provider?

Small and medium-sized businesses benefit the most from working with a reputable IT services provider for their IT and cyber security needs. One of the main reasons is that the cost of employing the right number of IT resources to support a business with 20-500 computer users effectively is generally more than these size businesses can (or are willing) to invest in IT.

There are also 5 more notable pros to outsourcing IT to a managed IT services provider.

1. Financially Motivated to Prevent Problems

MSPs generally work on a flat-fee contract basis, so they’re financially motivated to keep their customers happy and problem-free. No matter how many help desk tickets are submitted, the price for their service does not fluctuate. So it’s in the outsourced provider’s best interest to provide proactive maintenance and support, ensuring things continue to work how they should.

Also, vendor results are typically watched more closely than those of employees, creating more incentive for the MSP to provide your business with top-notch IT support to ensure a lasting relationship.

2. Managed IT Services Providers Are Always Available

They don’t go on vacation. They’re never “off” or out sick, they’re available after hours and weekends (depending on the agreement), and you don’t have to worry about the HR aspects of managing in-house IT personnel.

3. Resources Are Rapidly Scalable

If your company experiences multiple problems at once, an MSP will be able to quickly allocate as many resources as needed to solve those problems simultaneously. This means multiple employees can get help from different IT technicians at the same time.

When things are working smoothly, nobody is being paid to sit and wait for the phone to ring. The result is reduced downtime and improved employee productivity.

4. IT is Their Core Competency

Your business can focus on what it does best, while your MSP focuses on what it does best. Since their business is your company’s IT, you benefit from their economies of scale, the technology partnerships they have, and the innovative ideas from their industry experts.

5. Access to Subject Matter Experts

IT as a category contains many disciplines: cyber security, cloud computing, data backup and storage, communications, networking, ERP, EMR, and much more. Unfortunately, most small and mid-sized businesses can’t afford to employ experts in each of these areas.

For example, expecting a help desk specialist to also handle cyber security is like hiring a marketer and expecting them to also handle accounting. However, when you partner with an MSP, their team of experts is easily accessible because the cost of employing them is distributed amongst each of the MSP’s clients.

What Are the Cons of Outsourcing IT Services?

Managed IT services providers are evolving and changing, and significant advances have been made in recent years. With today’s technologies, outsourced IT providers can feel like a part of your organization, but for some, it’s just not the same.

The right managed IT services arrangement mostly has pros, but it's not right for every company.

1. IT Staff May Not Be In the Office All the Time

Not having IT staff in the office all the time makes some business executives uncomfortable. If you're used to having your IT person in the office, the transition to making a phone call or submitting a ticket to get support can take some getting used to. Some managed IT services providers (like VC3) have agreement types where you can have someone onsite at all times to help ease this transition.

2. A Shift In Control

Having a third-party manage your IT may mean shifting control. You're still in the driver's seat when it comes to deciding the future direction of your IT and investments, but you're putting trust in a third party to make the right decisions on your behalf in some cases. For example, if a critical patch is released, the outsourced IT team will likely notify you that it's happening, but may not ask for approval each time due to the urgency at which it needed to be applied. 

3. Internal IT Staff Needs May Be Reduced

It could (but not always) mean letting go of in-house IT personnel. If you already have IT staff, sometimes hiring a managed IT service provider creates a redundancy. At that point, it's up to you whether you choose to keep that role internal or outsource it. 

4. Organizational Change Can Be Tough

It changes “how we’ve always done things” and requires some organizational change. It can be hard to let go of old habits. For example, if an employee calls in requesting access to a protected folder or system, the MSP will need approval from you to do so. The MSP will go through the approvals process that you've set up with them before completing the task. This is sometimes frustrating to the employee because they used to just ask their IT guy and he'd do it.  It's a change in how things work, however, you can see why the MSP needs the added approval from management when giving access to sensitive or protected information. 

5. Could Be More Expensive if It’s Not the Right Arrangement

If the agreement is not structured in a way that benefits your company, you could end up spending more than you should. Every MSP is different in how they price and package their services. Look for an arrangement that incents the MSP to prevent problems instead of profiting from them. 

Do the Pros of Outsourced IT Outweigh the Cons?

For most businesses with the right IT arrangement, yes. But every business is unique.

Choosing to rely on a third party to manage some or all of your IT operations is a huge decision. Whether you decide to outsource the IT department or keep it internal, one of the main factors to your success is you. Without properly managing the IT staff or outsourced vendor with the right metrics and KPIs, you will not get the results you’re looking for from IT. The right IT vendor will help you along that path, guiding you to get the most out of your IT investments.

Editor's Note: This article was originally published in August 2016. It has been revamped and updated with the latest information.