For small and medium-sized businesses, making the right decision on when to outsource IT and when to bring it in-house is essential to maximise your business growth.
Canterbury has a thriving community (or maybe several communities!) of vibrant, independent businesses. How can the many business owners, all running very different businesses in the town, make the best decisions for their Canterbury IT support?
Differences between in-house and outsourced IT
There are three distinct strands to managing IT well. For a start-up or very small business, all three may be managed by the same person, but each still needs proper consideration.
- Strategic – the strategy can be very simple (e.g. “Minimise downtime”), but for IT to truly support your business, it needs to be defined and owned by someone.
- Management – someone needs to approve decisions about IT and ensure activity is within budget. This usually goes hand in hand with strategy, but it is a separate task.
- Operations – the tasks and workload that deliver an IT service to your employees: main tasks are delivering IT projects, maintaining IT infrastructure and providing support to your users.
In-house
To manage your IT in-house, you need to recruit people with the relevant skills to cover the above. Strategy and management, for example, might sit with a tech-savvy Director and you recruit an IT support assistant for day to day operations. Or you may recruit an IT manager and one (or more) IT support assistants. Smaller businesses often can’t afford to hire a full-time senior IT leader and may lack strategic oversight, meaning they get left behind by competitors.
Outsourcing
Outsourcing involves using a supplier for all or part of your IT. What usually comes to mind is outsourcing IT operations; however, many organisations don’t realise they also need IT strategy and management. With the right supplier you can get valuable guidance on IT management and strategy, which will make your IT operations significantly more effective and more efficient.
Key factors for Canterbury businesses to consider
Each business is different, so to make the best decision for your business you should consider each of the following.
- Budget.
- Growth plans.
- Business complexity and size.
- Security and compliance requirements.
- Role of IT in your business and your service to customers.
Budget
For a smaller business, in-house IT teams tend to be more costly. Most businesses don’t need full time IT support until they have more than 400 machines, unless there is something unusually complex about the set-up.
A full-time team may be more than your business needs, therefore, and you have to be sure you can offer a salary that will attract the right level of expertise. Because outsourcing lets you pay for what you need (like the pay as you go service Heliocentrix offers) without having to worry about overheads, training, ongoing development and HR, it’s usually a cost-effective option for a smaller business.
Growth plans
Your IT support needs to fit not only where your business is now, but where you expect to be in a year, two years or more. The right support will remove roadblocks and improve productivity, giving your growth a real boost, as we did in our work to streamline the sales process for Cascade Insurance.
In-house IT is good for giving you complete control with a team who understand the business and can create highly customised solutions, they will also be immediately available when support issues arise. However, it is slower to scale than outsourcing.
When you need IT expertise quickly, for either a one-off project or on an ongoing basis, outsourcing gives you that and it is more flexible in adjusting that support up and down, as you need it.
Another distinction is that in-house IT will have up to date knowledge of your systems, because that’s what they’re working with. Outsourced IT experts work with many different IT systems, for different organisations. When working as part of a wider team (as our consultants do) they absorb a lot of information about the very latest developments across all kinds of technologies. If you have ambitious growth plans or operate in a fast moving sector, outsourced IT offers a breadth of expertise that will keep your systems ahead of your competitors’.
Complexity and size
How integral is IT to your services and operations? All businesses now rely on telephone systems, internet access, email providers, and digital file storage. For a smaller business (50 people or fewer) this level of IT infrastructure could be managed in-house. The downside is that if simple systems aren’t set up with a good level of senior IT expertise, they can hinder growth or create security issues later.
For larger organisations, or those with specific IT needs (like managing a customer call-centre, managing remote training for a large, distributed team or stringent digital compliance requirements) outsourcing is a better option. A good example is how Heliocentrix worked with Brooknight Security to consolidate its IT systems for their workforce of 50 office based staff, plus a much larger group of security guards working remotely. Outsourcing provides cutting-edge expertise across all IT functions, with technicians who have experience across many different sectors.
Security and compliance
All businesses must comply with data protection regulations and the business is responsible for putting appropriate cybersecurity measures in place. Failure to do so can result in severe penalties.
For some, like financial services firms, solicitors and GP surgeries, the data they handle is particularly sensitive and they must comply with the general data protection regulations as well as sector specific compliance requirements. They need specialised IT systems, in terms of security, auditing and case or client management. An in-house team will develop a deeper understanding of your systems and will be immediately available, at any time, to resolve issues. In-house also keeps all of your data-risk in-house, but it often comes at a cost.
Outsourcing, on the other hand, will give you access to a broader set of expertise around security and creating bespoke systems. This gives you access to the very latest security and compliance solutions and yet you only pay for the time you need. When outsourcing, it will be important to find a supplier who has experience in your sector, understands your compliance requirements and is familiar with the systems you use.
Role of IT in your service to customers
For some businesses, IT is primarily a support service. For others, IT and digital service development is a core part of the service provided for customers. A security company or a biotechnology company will each face more IT risks and will have a more complex IT strategy than most marketing agencies or small creative businesses.
Where IT is enmeshed in product development, it may make more sense to invest in an in-house team when your business is small or not yet fully established. It will depend on your budget and finding individuals with the right skills. In this case, you may still benefit from outsourcing for specific IT projects, if you need to increase headcount quickly for a new client or even to take the day-to-day IT support off your hands.
Summary of in-house vs outsourcing factors
In-house may be better for your business if:
- You have the budget to recruit full-time staff and their ongoing development.
- You’re not planning for business growth, you manage IT in-house already and your systems are sufficient for your needs.
- Your business growth fits a predictable timeline, giving you plenty of time to prepare for increases in your levels of IT support.
- Your systems are fixed or highly specialised, and need a dedicated team who are always available.
- IT is core to the service to your customers and you are continually developing it.
Outsourcing may be better for your business if:
- You have a limited budget and it wouldn’t make sense to hire full-time staff (a pay as you go option works well for start ups and small businesses).
- Your business growth plans involve scaling up or down quickly and flexibly.
- Your have complex systems or unique processes and therefore need IT expertise that is always up to date, so your business can benefit from the latest developments.
- You need IT expertise that is wide-ranging (strategy, cybersecurity, disaster recovery, automation, AI, system design, help-desk).
- IT is more of a support function for your business, and you don’t already have a director or senior leader who has deep expertise in digital solutions or design.
Looking for IT expertise?
If you’ve weighed up the options and you’re still finding it hard to know whether in-house or outsourcing is right for you, you may need a blend of both. With the diversity of businesses found across the South East and in Canterbury in particular, there’s really no one-size-fits all answer.
If you’d like to talk through your options with a friendly, local IT supplier, contact us today.