In-House IT vs. Outsourced Support in 2019

Discover the Best Data on IT Outsource vs. IT In-House Costs

What are the 2019 costs for in house IT management vs. outsourced services? Here's what you should know.   

As developing businesses set new goals and re-align their budgets, one question comes up across all kinds of industries: Is it time to switch to in-house IT, or is outsourcing support and services our best option?

The choice comes down to what your business needs at that particular stage of growth – and, of course, how much each option costs for you. While this does vary across the industry, it is possible to summarize costs for companies taking a close look at what they can afford, and what they get in return.

In-House IT Staff Costs: Approximately $50,000 Per IT Specialist

When an internal team covers IT, businesses can customize the services to exactly what they want. However, hiring and training are also entirely dependent on the business. Qualified IT workers will cost at least $50,000 per year in today's economy, and their compensation will include other considerations like business hour limitations, benefits, vacation days, etc.

A common rule states that you need about one IT employee per 65 computer users in your company. In an office of around 100 people, you can expect to spend $100,000 in annual salary expenses. Some companies attempt to cut down on these expenses by assigning IT roles to employees in addition to their current position, but this brings its own constraints and is generally not a viable long-term solution.

Additional Considerations and Resource Management

Companies looking at their budgets must also consider the initial costs of setting up an IT department. They may require extra space, server rooms and additional technology at the beginning. These components will also need to be improved and added to overtime, creating long-term costs that should also be accounted for (and in IT services, necessities can evolve at surprising speeds).

It’s also important to think about the specific services and goals that IT specialists will be offering. Are there large-scale projects that you need IT to work on? For example, your company may want to digitize important records, adopt business collaboration software, or switch to a VoIP system. This will take more planning, added expenses, and probably more IT manpower. In most circumstances, limited IT staff will only be able to tackle day-to-day tasks.

Outsourced IT Services: Monthly Costs x 12

Vendor IT services depend very much on the individual plan your business creates with a vendor or the available package that you choose. Your needs will dictate costs, so this analysis will require research and firm goals before you know total costs.

In general, full infrastructure IT services for around 75 users and multiple servers with unlimited support and CIO services will cost between $5,000 and $9,000 monthly or $60,000 to $108,000 per year. A basic plan with simple management and maintenance may cost between $1,800 and $2,500 per month or $21,600 to $30,000 per year.

This is a wide range and a sign of how important it is to understand your own needs when looking for the right services. However, there are also a number of additional expenses that are entirely covered by the vendor, such as ongoing training, upgrades to new hardware, new certifications, system maintenance, and so on. This often makes vendor services more scalable for growing business, particularly at certain stages of expansion. It's also worth noting that downtime and unavailability are less of an issue with vendor-managed IT, where vacation days aren't an issue and uptime is usually guaranteed at near 100%.

Additional Considerations and Responsibilities

Keep in mind that your business will still need a touchpoint with your vendor. In this case, the responsibility can typically be merged with another position, although this often leads to a compensation increase as well, so budget for your point-of-contact. Fortunately, you have more flexibility in how you approach in-house IT management – and initial costs to set up IT services are significantly lower when using a vendor that doesn't require extra space or hardware.

This also means that support is particularly important when outsourcing IT. You need reliable support options that include strategic planning for future improvement or upgrades as your business develops. A vendor that's too hands-off will lead to complications in later years.

Looking for the right solution for your business? Schedule a no-obligation technology consultation with EPC IT Solutions, where we can discuss your goals and provide insights for your next move.