8 essential considerations when outsourcing IT services

Every business relies on its IT infrastructure to carry out routine operations, and investing in a strong IT backbone can mean the difference between success and failure.

Businesses need to decide whether to have an in-house IT department, which can take up a lot of resources, or outsource their IT services while the company focuses on its core operations.

According to the 69th Quarterly ISG index, IT support services comprise 72% of global outsourcing contract values. These numbers reflect the growing importance of outsourcing specialized services such as IT support and the growing reliance of businesses on these third-party options.

As a business owner, you must make decisions to benefit your organization. Third-party IT services are appealing for several reasons, but spending time and effort finding the perfect IT company for your needs is essential.

How does outsourced IT support work?

IT support refers to a broad range of services focusing on an organization's hardware and software. These services range from setting up and running a secure network, keeping PCs and software current, implementing data storage solutions, providing technical support to employees, and ensuring the security of the organization’s data and networks.

A good IT department requires individuals with experience and training in these various services. Some larger organizations will have sub-departments that compartmentalize IT services into specialized components, allowing these teams to provide the best possible service.

The problem with an in-house IT department is that it takes time to set up and requires resources to function. IT employees need regular training, and falling behind can mean a less flexible business that can’t adapt to changing conditions.

Many small businesses start with one “IT person” that handles all of the company IT needs. However, organizations often quickly outgrow their IT capability, leading to shortcuts, inefficient systems, and one overwhelmed IT professional. Mid-sized businesses are in a difficult spot where they may not have the resources to fund a fully-fledged IT department but require the services of one.

A popular solution is outsourcing IT services. In this model, your business works together with a third-party provider who will carry out essential IT work and support your growing business. Even better, IT department outsourcing is often modular, allowing companies to tailor their contracts to suit their needs. So even if you have a small IT department, outsourcing can alleviate some of the pressure, allowing your in-house team to focus on important projects while the third-party team handles the day-to-day aspects of IT management.  

Benefits of IT department outsourcing

Small and medium businesses are often reluctant to move away from their existing IT solutions due to the potentially disruptive nature of having a third party handle such an important role. However, while IT support outsourcing may feel like a drastic step, it offers numerous advantages to most businesses. These include:

  • Lower initial costs: Setting up network infrastructure and establishing IT procedures takes time and resources and may introduce downtime into organizational operations. While expanding IT services is vital to keep a business growing, many businesses struggle to find the capital to fund this large investment. Third-party companies already have these resources in place, allowing you and your IT team to use them without having to fund them yourself.
  • Expertise: A small IT department cannot offer expertise in all facets of an IT service without extensive training and expansion. A third-party provider can offer this expertise, which is doubly useful if you only need this knowledge for a single project. Many outsourcing companies even offer knowledge transfer to grow the experience of your in-house team.
  • Scalable services: As businesses grow, their IT needs change. While it’s possible to adapt your IT department to meet these changes, it’s much easier to change your outsourced IT service to meet your new demands. Similarly, if you no longer need a particular service, you can remove it from your plan instead of retrenching or reassigning your in-house employees.
  • Full-time monitoring: Internal IT departments work on a specific schedule, which limits support during non-business hours. Outsourcing IT services opens up around-the-clock services for help-desk support, network monitoring, and many other services.
  • Better use of in-house teams: IT departments usually spend a lot of time dealing with routine tasks or assisting employees. Outsourcing these tasks can free the IT team to focus on more important work, such as improving your network infrastructure or implementing new data management strategies.

8 major factors to consider before outsourcing IT support services

While deciding whether to go with in-house or third-party IT services is a big decision, it’s not the only one you’ll need to make. Plenty of IT companies offer third-party services and deciding which would be the best fit for you can feel overwhelming.

Your IT support company will be a close partner that can affect your organization on several different levels. It’s vital to shop around for IT support in Victorville that values your business, is willing to listen, and will tailor its services to your needs. Taking note of your requirements and understanding how the partnership will impact your business is the first step in narrowing down your options.

Consider these factors before settling on an outsourced IT service:

1. Budget

Balancing services with your budget is always challenging, but you need to know what you can spend before outsourcing your IT department. While outsourcing is usually more affordable than in-house IT, especially if you haven’t set up any dedicated IT infrastructure, you still need to account for the monthly fee that third-party IT services charge.

2. Operational control

It’s possible to view outsourcing as ceding control of a vital business operation, but most reputable IT outsourcing companies will be willing to implement whatever level of control you want.

Most companies find a compromise where they hand over control of non-core functions such as IT support and help-desk services, allowing their in-house team to focus on core functions. Other businesses want to retain full control over all IT functions while using third-party providers' expertise.

No matter what your decision is, be sure to create an appropriate framework with the outsourcing company. This framework will also assist in building a healthy relationship between the existing IT team and the third-party operators by clarifying roles and responsibilities and ensuring that no functions conflict with each other.

3. Cybersecurity approach

According to Statista, the average data breach costs U.S. companies $9.44 million. While some attackers target large, famous companies, SMEs are still vulnerable to cyberattacks and need to take security seriously. Even if a breach doesn’t steal valuable information, it can take up to 277 days to identify and contain a breach, representing a huge sink in IT resources.

Trusting your IT infrastructure, network, and support services to an outsourcing provider can add a layer of risk. You may not have to share all your sensitive data with the outsourcing IT team, but they represent an additional vulnerability if not taken seriously.

Before outsourcing IT services, ensure that the company you’re working with has adequate security control, including one-time pins or other forms of two-factor authentication. Also, set clear boundaries regarding which data the third-party provider can access.

4. Project vs. continual support

Outsourcing IT support services doesn’t have to be an ongoing service. Some companies will hire a third-party IT services provider to help with a specific project, such as data migration or security testing. Outsourcing a specific project is often more affordable than a continuous service, especially if you already have a foundational IT department in place.

One risk associated with outsourcing IT services for a particular project is that you don’t gain the intellectual capital associated with the investment. If your outsourced IT team starts and implements a project, your in-house team will not develop the capacity to fully understand or maintain the application after the outsourcing team leaves.

However, some outsourcing companies offer the option for “insourcing”, which combines the expertise of a third-party firm with the facilitation of skills transfer to the in-house team, allowing the in-house team to continue the project after its successful implementation.

5. Experience

One of the major reasons companies consider IT outsourcing is to fill in a skills gap. You may need a dedicated cybersecurity team or assistance implementing a new platform or system. Confirming that your chosen IT outsourcing company has the necessary skills, experience, and certifications to provide the required services is vital.

The outsourcing company’s experience with providing IT services is also important. A company may have experienced professionals, but if it doesn’t have experience providing third-party services, you may run into problems such as poor communication, insufficient frameworks, and conflicts over data access or roles and responsibilities.

Niche businesses may also find that working with a generalist company doesn’t provide them with the services they need. These companies may require specialized software or have unique requirements regarding data privacy, network security, or platform integration. An inexperienced third-party IT services provider may slow down existing projects and make costly mistakes.

6. Staff morale

If you have an in-house IT employee or department, you need to be ready to manage morale. In-house employees feel looked over and unappreciated when their employer outsources their tasks to an outsider. These feelings can lead to resentment and an unwillingness to work with the outsourced IT team, leading to decreased productivity and revenue.

As a business owner, you’ll need to communicate your reasoning for the outsourcing of IT services. Outsourcing IT services gives the IT team more time to focus on core projects or supports the team with additional expertise. You should also highlight the short-term and long-term benefits of working with a third-party provider and clarify that the organization still values its IT department and its role in the business.

Buy-in and cooperation from your in-house team are essential for any successful outsourcing endeavor. The more open both parties are to collaboration in the mutual interests of the business, the higher the productivity of both teams.

7. Break-fix vs. managed services

Outsourcing IT services offer two types of service models: break-fix and managed IT services. Break-fix companies work on an hourly basis and provide help when something in your IT network breaks (it breaks, they fix it). In essence, they provide reactive support to take pressure off your IT department that doesn’t have time to handle minor technical issues.

Managed services offer proactive assistance where they handle the operations of a particular IT service. For instance, most managed IT providers offer the following:

  • 24/7 help-desk support
  • Continuous network monitoring
  • Compliance management
  • Software installation and maintenance
  • Server management
  • Cybersecurity

Which service you choose will depend on your needs and budget. Break-fix companies are more affordable as they charge by the hour and do not have a fixed monthly retainer. However, their help is limited to reactively dealing with existing problems.

Managed IT services offer a more holistic solution at a higher price. You can often tailor your outsourced IT service to your needs, ensuring seamless integration between your in-house team and the outsourcing service.

8. Communication

Outsourcing IT services presents a unique challenge, especially with communication. You may not have a problem working with an LA-based company if you’re in California, but if you decide to work with an offshore company, you’ll need to factor in time-zone differences and potential language barriers.

Experienced outsourcing companies will have plans in place to overcome communication barriers. You’re also less likely to experience these issues by working with a local company that you can communicate with remotely and in person.

Our final thoughts

Sonic IT Systems has helped hundreds of California businesses thrive by providing top-class outsourced IT support, and we can do the same for you. Check out our blog to learn more about important IT issues that may affect your business.