Should You Hire an In-House IT Consulting Team or Outsource?

December 04, 2017
This means that whether your company is in the technology sector or IT just plays a supporting role, at some point, you will may need to choose between building or growing an in-house team or outsourcing your IT needs to an external firm.  

Like most business decisions, both options come with pros and cons and what is right in one situation is not necessarily right in another. Ultimately only you will know what is best for your circumstances, but weighing the following factors is the first step towards making an informed decision. 

The Benefits of Internal Staff

Building an internal IT team may be your natural inclination and it comes with a host of advantages. They include: 

Face time: From software installation, monitoring, and maintenance to network provisioning, development, and automation, IT will touch nearly every employee—and potentially every customer—in your organization. Having a safety net in the form of internal IT support can preserve morale, especially among non-technical staff and customers that could become frustrated with outside help that is difficult to get a hold of. In a technology company, face-to-face interaction among technical employees can keep team members engaged and lay the foundation for the sort of unstructured brainstorming that leads to new ideas. It can also mean your existing staff doesn’t have to take middle-of-the-night conference calls or expensive overseas trips. 

Control: As an employer, you’ll have greater control over timing, quality, and the composition of your team, including the ability to closely evaluate each individual’s technical acumen and cultural fit. It’s also more likely you’ll retain key institutional knowledge, like system requirements and the thought processes behind business decisions, during times of transition. Without in-house expertise to fall back on, it’s easy to feel like you are trapped into staying in a long-term outsourcing relationship or risk the stability of your network or application. 
 
Conflict resolution: When IT is weaved into the fabric of an organization, on-site employees can make quick fixes, triage incoming requests, and reprioritize responsibilities in real-time, which is challenging in remote collaboration and nearly impossible for teams at opposite ends of the globe. They’re also more likely to be familiar with what’s happening in other areas of the company, like sales and marketing, and have a better grasp of the big picture when they offer technical solutions.

When Outsourcing Wins Out

Despite these advantages, there are many times where outsourcing is the better approach. Some factors to consider include: 
 
Cost: The most obvious and well-known outsourcing benefit is cost. Not only does outsourcing enable you to take advantage of labor arbitrage, it reduces expenses related to recruiting and onboarding, employee benefits, liability insurance, overhead (everything from office space to breakroom coffee), and compliance of state and federal employment regulations. These savings can mean a world of difference for small businesses with only a handful of employees or bootstrapped startups just getting off the ground. 
 
Recruitment: Even when budget is not a primary concern, finding and hiring top IT talent can be extremely difficult and time-consuming. Both competitive tech hubs like San Francisco and cities with a small pool of skilled workers have a high demand for experienced professionals. The strongest local IT professionals will likely already be employed, giving them an upperhand in negotiations and requiring a salary increase to be wooed away. It’s even possible to find yourself in a bidding war over new grads. When an employee inevitably departs, you’ll have to start the process all over again.
 
Flexibility: While in-house staff has the upperhand in terms of response time, for that to be true, you must already have them in place and with enough bandwidth to address issues as they arise. When you add cost and recruitment to the mix, it may not make sense to have a large, full-time, dedicated team—especially if it leads to underutilization or when a specific type of expertise is only needed for a temporary project. Similarly, a staff member may be the only person equipped to address an IT issue, which becomes an issue if he or she takes a vacation or calls out sick. On the other hand, an outsourcing vendor will almost always have someone on standby who can help out in a pinch. It’s also worth noting that from both a legal and ethical standpoint, it’s more difficult to let an employee go than cancel a contract. 
 
Competency: Assuming you’re working with a reputable outsourcing firm, you benefit from the collective experience of a team of IT experts. Because outsourced professionals often work with a variety of clients and within different industries, they can bring a wider variety of tools and experiences to the table, which leads to more creative solutions as well as efficient and effective IT decisions. On the other hand, even the smartest IT generalist will struggle to keep up-to-date with every facet of the job and typically be more skilled in one area than another. Outsourcing is often having a team of IT professionals for the price of one.
 
Making the Call
 
In the past, the choice between an internal IT team and outsourced support often came down to the business leader’s comfort with the risks associated with going overseas. But by partnering with a domestic outsourcing firm in the midwest, for example, you can avoid many of these risks while still saving on labor. 
 
Likewise, while many people believe the decision to outsource is always based on cost, that is not always the case. Outsourcing enables non-technical businesses to focus on their core competencies and offers a great deal of flexible expertise for technology companies, while an in-house team can cut costs by being more efficient and help retain non-technical staff and customers. 
 
After considering these factors, if the decision still isn’t obvious, you may benefit from not making a choice at all. Many businesses choose to have a small in-house IT team that oversees an outsourcing vendor, which is responsible for manual work that would unnecessarily eat up too much staff time as well as temporary projects that require specialized expertise for a finite period of time. It’s like having your IT cake and eating it too.