IT outsourcing is a popular trend as many of the world’s largest, best-known firms turn to IT managed services to provide managed or co-managed IT services. Recent statistics indicate that nearly 75% of companies outsource IT services, and the overwhelming majority of these firms plan to either maintain their current relationships with IT MSPs or expand them.
The success rate for companies partnering with IT managed service firms is impressive. Pricena, CuriosityStream, StudyTube, and Slack have turned massive profits thanks to partnerships with third-party IT developers. Citigroup, which has seen growing profits in the last few years, laid off thousands of tech employees and offshored their skills to outside contractors. Even so, the question remains: Is outsourcing a current fad or a steady trend that will benefit companies long-term? IT managed service owners and executives weigh in, offering a peek into their industry and what it offers the business community.
Alexander Freund runs 4it, an IT managed service in Miami, Florida. He points out that, for many organizations, outsourced IT services are almost always less expensive than hiring an internal IT department. Recent salary assessments prove him right, as the average annual salary for an IT technician is $73,825 and this sum doesn’t include expected benefits such as parental leave, tuition reimbursement, professional development assistance, and life insurance. Even companies that do manage to hire their own in-house technicians are likely to face retention problems. Poaching is not uncommon as companies fight for experienced, specialized IT help that’s often in short supply.
Additionally, as Ian Brady from Steadfast Solutions has found, companies with anywhere from 80 to 200 employees often have problems with IT tech workers becoming complacent and reactive when asked to improve their standards. Generally speaking, it’s harder to enforce accountability in service metrics in an employee-employer relationship than in a client-service provider relationship. What’s more, even conscientious IT technicians who do their jobs to the best of their ability may not have the well-rounded experience and ongoing training needed to handle certain problems.
Freund also points out that most companies need a range of IT resources but not a full 40 hours a week. Small business owners that can’t afford to hire in-house IT technicians full time are therefore likely to benefit the most from outsourcing IT operations, as outsourced services enable small companies to gain access to specialized IT help at a reasonable price, and nearly all IT manage service providers offer scalable services to meet the needs of growing businesses. However, as mentioned above, the move to outsource IT operations to third-party service providers isn’t just a small-industry trend.
Holden Watne from Generation IX Technologies in Los Angeles, California, explains that his company was recently hired by an international OEM based in Australia to provide support for US employees. The deal gives the OEM access to fast response times for IT help requests, boosting company productivity. What’s more, the OEM gains access to specialized IT assistance such as expert help planning a company transition to Microsoft Intune. Such services are typically unavailable from full-time IT technicians who are often too busy dealing with daily issues to help draw up and implement long-term IT improvements.
Conversely, large firms may opt to have in-house IT technicians handle specialized jobs while hiring an IT managed service to handle day-to-day, routine tasks. Guy Baroan from Baroan Technologies in New Jersey, notes that his firm has several clients that outsource their day-to-day IT tasks such as cybersecurity management, patches, and software updates to his firm. This enables clients to save money that would have otherwise been spent hiring additional IT personnel while freeing in-house IT experts to handle important projects.
While it’s more common for firms to hire an IT service provider for the provider’s expertise in certain areas, many large firms can benefit from having a service provider handle mundane work while corporate IT technicians who are already familiar with a company’s industry and the firm’s core goals handle long-term IT projects that would improve customer service and employee efficiency.
IT managed services aren’t going anywhere for the foreseeable future. A growing number of companies have found that outsourcing some or all of their IT operations is the best way to create or maintain an optimized, fully secure IT set-up. Ilan Sredni from Palindrome Consulting in Southern Florida sums up the three primary benefits of outsourcing IT operations to a third-party provider.
Sredni notes that hiring a third-party provider ensures a company always has a reliable IT team to work with even if in-house IT experts go on vacation or get sick. Furthermore, IT managed services put a premium on continually staying abreast of IT trends and developments to ensure clients have access to the best IT tools and technologies on the market. In-house IT technicians who can barely keep up with maintaining a company’s IT systems on a daily basis simply don’t have the time or resources to stay abreast of the IT industry like manage service providers do. Finally, IT managed service providers offer their services at a fixed rate. The flat fee agreements make it easy for companies to budget IT expenses while keeping costs to a minimum.
Simply put, IT managed services won’t replace in-house tech services but continue to supplement them, boosting business growth for large and small firms alike.