Businesses across the world are increasingly relying on outsourced Information Technology (IT) service providers. And, why wouldn’t they?
Small businesses would do better with a managed IT team, rather than hiring in-house staff. With limited capital and funding, scouting out human resources with experience and onboarding them would be a cost that is unimaginable for small organizations.
Medium-sized companies have a vision of growth. They want to spend time on working towards becoming an authority in their industry. For such businesses, time is money. Organizational fit is key as well, as these firms look to grow with someone who shares their vision. With their focus on their unique selling propositions and core services, spending time hiring and making space for a full-fledged IT team will be hard for mid-sized ventures.
A huge global corporation is a household name in their industry. They have established a reputation for their services/ offerings and have a crucial need to sustain their name. IT infrastructure and maintenance at the scale of a conglomerate would be very tough to manage by an internal group of IT members.
Money, time and scale are three key reasons why companies, at all levels, prefer managed IT service providers to in-house IT staff. The need to be up-to-date with domain knowledge and the recent threats to cybersecurity are few other reasons. However, as an Operations/ Human Resources Manager or even the CEO of the company, you are probably keen on knowing the expenses associated, for budgeting.
Here are some figures (Gartner, 2017), which could prove useful in seconding your company’s decision on outsourcing IT management.
1) Small businesses, making less than $50 million, could spend nearly 6.9% of their annual revenue on in-house IT
2) For medium-sized companies making between $50 million to $2 billion, the average cost is $13,100 per employee (4.1% of the revenue)
3) For large companies, with $2 billion in revenue, the per employee cost could escalate to $11,580 (close to 3.2% of their revenue)
Looking past the monetary encumbrance of hiring and training IT staff, there are other factors to be considered in the in-house vs. managed IT debate.
Companies suffer 350 hours of IT downtime per year, which could amount to approximately $40 million in disbursement. If you think that the damages occur only in the case of drastic system failures or mass cyber breakdowns, think again.
Virus-infected drives that need replacement, power failure and downtime from system maintenance are all small drops that add up to an ocean of costs that are incurred from in-house IT management. Faulty electrical connections, slow internet and the upkeep of on-premise software and data could be other reasons that fall under the same bucket of “minor” IT expenses.
Putting aside all the tangible expenditure, there is an important cost many companies fail to account for when it comes to internal IT management. The ‘goodwill’ of customers.
Businesses, at any stature, need to safeguard the impression that their clientele has of them. A slowdown in processes and slack in productivity are intangible outlays that can have a long-term effect on the valuation of an organization.
Technical Action Group, managed IT service providers since 2003, has helped companies overcome the many hassles faced by their internal IT team, with our capabilities. To know more about how much we can help your company save, get in touch with us today.