To outsource or not to outsource: That is the question. For many CIOs and business owners, outsourcing IT comes with some clear business advantages that make it a lucrative alternative to an internal IT department. For others, the issue is not as clear. However, most find that this model frees up time and resources while providing their business with valuable, competitive services — and some unexpected perks, too. Here’s how it all shakes out.
More Focus on Core Competencies
Banks bank. Marketers market. You shouldn’t have to become an IT expert just to run a business. Trusting a provider with your company’s IT means you gain time to focus on your main objectives. You’ll free up resources that can be redirected to your clients, products and services.
Even if tech is your core competency, you may still find some use for an external team. Chances are, your IT team members are already busy with administrative and maintenance tasks. Outsourcing routine work to a managed service provider frees your in-house staff from maintenance minutiae, leaving time for more valuable IT projects. They can concentrate on innovation, automation and other activities that will set you apart from your competition.
Significant Cost Reduction for IT Services
Money talks, and for many CIOs and business owners, the cost savings offered by outsourcing are significant enough to make them very persuasive indeed. Most notably, converting IT functions to a managed services model allows you to cut back on internal personnel. With an internal IT team, you’ll need to cover not only several top-tier salaries but also benefits, federal and state taxes and other associated costs.
Just how much can that affect your budget? The Bureau of Labor Statistics estimates that each employee costs his or her employer an average $35.28 per hour. Yet only about 68 percent of that — in other words, an average $24.10 per hour — goes toward employee salaries. A managed services provider, on the other hand, typically charges a tiered monthly rate for various services and devices. The price varies depending on the type of plan, your needs and your provider. But most companies find this model to be much less expensive than running an internal IT department.
Reduced IT costs don’t just benefit your bottom line. Businesses are able to transfer these savings directly to their customers, delivering products and services for a lower fee. For instance, in this 2016 Deloitte survey, over 40 percent of respondents said outsourcing allowed them to reduce delivery costs, creating a compelling argument for managed IT services.
Flexible Infrastructure Investments
Internal IT teams typically thrive in predictable environments, where they can chip away at projects slowly and deliberately until they’re completed. Unfortunately, steady, predictable growth is a luxury afforded to few industries these days. Increased geopolitical instability and technological innovation have combined to make markets and business conditions more fickle.
In fact, as IBM argues, the big data boom has thrown a wrench in steady, predictable growth. In the coming era, businesses will need to be able to harvest and analyze massive amounts of data from multiple sources — and respond even more quickly to changing business conditions. The value in an outsourcing model is the flexibility it offers: Companies can rapidly scale up infrastructure investments and security, without much worry about how it will impact their staff or company morale.
High-Level Security and Expert Knowledge
Think your business is too small to be noticed by hackers? Think again. Cybercrime has increased immensely over the past decade; in fact, there were more than 4,000 ransomware attacks per day in 2016. Experts predict that attacks like these will cost businesses $6 trillion annually by 2021.
According to CNBC, half of all U.S. small businesses faced some kind of attack in 2016. So if your company hasn’t been targeted, you’re either really lucky — or you simply haven’t discovered the attack yet (it often takes businesses over 200 days to realize a breach has happened).
Turning your IT security over to a managed services provider can prevent some of vulnerabilities that allow hackers access to your data. External IT members can monitor for suspicious activity, provide added security features like firewalls and data encryption, and support you with disaster response and recovery during a security event.
Of course, IT outsourcing isn’t right for every business. Many businesses prefer alternative models, such as an external all-in-one IT department like the kind we offer at Taylored. Don’t worry, though. You don’t have to make the decision alone. Our consultants and sales team members are happy to meet with businesses to design a solution that works for your team. We’ll help you examine your needs and decide if IT outsourcing is truly the right move for you.