The question of whether you should outsource or do it in-house has been circulating for decades, and it’s as imperative today as it ever has been. Depending on who you ask, where you’re based, and what industry you’re in, you could find that anything from 30 to 74% of your competitors outsource their IT.
The millennium decade saw a peak in IT outsourcing, with many companies now opting for a hybrid approach where they maintain some in-house IT functions but outsource others.
Identifiable Trend in IT Outsourcing
Broadly speaking, there’s an identifiable trend indicating a growth curve that companies follow where outsourcing IT is concerned:
- Less than 20% of start-ups outsource
- Over 60% of mid-sized businesses outsource and
- Around 43% of large and international companies remain outsourced while just 15% bring all of their IT functions back in house.
So, what’s the curve that successful companies follow and where do you find yourself on it?
IT is vital to most mid-sized businesses, who rely on their data centres to support many other areas of the business, and who need IT to resource their own teams as well as meeting the needs of customers.
With AI (artificial intelligence) and automation beginning to change the nature of customer relationships, there’s about an equal split between companies who handle this internally and those who outsource these new applications.
The Power of People
- Are your in-house IT personnel equipped to handle trends towards AI and automation?
- Will they be able to stay ahead of the curve in SAAS and business app innovations?
- What’s the overhead on keeping them ahead of the game?
For many organisations, answering these 3 questions is the crunch point; recognising a scenario where they can most easily develop the IT competence they need by relying on an outsource partner whose sole focus is on keeping their team skilled, confident and able to exploit every IT development to the benefit of their clients.
In-house or Outsource Can Depend on your Growth Strategies
- Does your organisation need to change direction rapidly? Has it already been impacted either positively or negatively by outside events? (brexit is looming!)
- Do you contend with seasonality or fluctuations in demand?
- What’s your focus – do you need to outpace rivals, catch up in a fast moving sector or exploit an opportunity?
Paradoxically, businesses that are already ahead of their growth curve can benefit from keeping IT in-house because they don’t have to get outside personnel up to speed on their own network and systems.
Those that are trying to master the curve are more likely to benefit from outsourcing, as it allows them to focus entirely on strategic priorities and core-competencies, leaving IT to a provider already proficient at working at industry pace.
Budget Constraints Can Determine IT Decisions
Where tight budgets hold an organisation back, outsourcing can reduce overheads by both cutting hiring costs and providing attractive purchase prices for software and licenses.
Internal resource reorganisation can be a make or break decision; if IT isn’t key to your business outsourcing can mean resources currently being used to keep IT in-house can be transferred to other, more directly beneficial centres of profit generation.
Hiring Expertise VS. Creating Expertise
Hiring expertise versus creating expertise – sometimes a business needs specialist expertise, but not for life.
For example, if you’re developing an app, you need a team of experts. But once that app is in use, you only need a maintenance team. Outsourcing helps by giving your company access to the right levels of expertise when they need them.
With the way modern business IT is moving, IT professionals must now possess more and more unique sets of skills. Today, these skills include, at a minimum:
- Quality assurance
- Microsoft Office/Office 365
These skillsets are both highly technical and wide-ranging requirements. Not to mention the additional skills often desired such as:
- Project management
- Big data
- Security and compliance
- Business intelligence/analytics
How many of these skills are already present in your in-house IT team?
Balancing Control and Commitment
Outsourcing IT can be seen as a solution that removes responsibility from the business but most organisations still benefit from maintaining contact with IT functions and having a team member who’s able to oversee what the outsourcer is doing and communicate with them effectively.
Choosing the Right Fit
For medium sized businesses it’s important to know that while most IT partners have structures that enable them to respond to all clients, it’s just a fact of business life that big clients will get ahead of your business if there’s a queue.
So, having a realistic sense of your business’s own IT profile allow you to recognise what type of company to seek out as your IT outsource partner, what to expect from them and what you need to be prepared for to handle yourself in a crisis.
There’s no one answer that works for all businesses, but understanding how your strategies, budgets and in-house personnel can impact, and be impacted by, these areas helps any company find its optimum IT path.