Pros and Cons of Outsourced Managed Services for Small Businesses

pros and cons, for and against argument concept. Man with glasses looking up decidingInformation and Technology are a critical component of any small business.  For many small business owners technology touches almost every part of the business.  It impacts team productivity, internal and external communication, customer service, and much, much more.

When something goes wrong business is quickly impacted – so, it’s expected that IT support and maintenance is (or should be) a part of every small business owner’s business plan. But the question is: should a small business owner outsource IT support to a managed services provider or hire a technology professional in-house?

To help here are some of the pros and cons of outsourcing IT support.

Pro: Savings and Productivity

Businesses that utilize outsourced managed IT services from a firm have predictive IT costs and typically realize a savings of 35% or more. IT operating costs are reduced as significantly because a small business does not need to hire one or two IT resources and continue to invest in training as the technology landscape rapidly changes.

Other savings are related to increased productivity as the result of a 24×7 help desk, increased up time and time saved as a result of vendor management (more financial details here).

Indirect savings include the reduction in risk from an outsourced IT provider. Managed service providers bring expertise in regulations (i.e. SOX, HIPAA, etc.) and can help significantly decrease the risk of a security breach.

Con: Loss of Direct Control

Hiring an outsourced IT support provider means that there is now a 3rd party responsible for your IT. As a small business owner you lose the ability to simply walk over to your IT team, make a request and immediately have the request addressed. When an outage does occur you are reliant on the provider to rapidly help and ensure that your business is operational as soon as possible.

Many outsourced IT providers will help mitigate these potential risks by providing active monitoring tools and regular business reviews to ensure alignment.

Pro: Greater Depth of Knowledge and Expertise

A great benefit of outsourced IT support and managed services for small businesses is the access to many more resources with a broader range of knowledge than hiring an internal IT team. Your provider will have engineers that specialize in networking, security, databases, compliance and much more. As an extension of your team this means that your small business will have a much more diverse knowledge of technology than is financially possible to hire.

Con: Unfamiliarity with Your Business

It isn’t possible for an outsourced IT provider to know as much about your business as it is for yourself or your direct employees. By not being in the office 8 hours a day, 5 days a week your provider the ability to gain the detailed knowledge about all of the intricacies of your small business like a full-time employee would gain.

This is often offset by the fact that an outsourced IT provider brings industry knowledge and expertise on best practices that have been learned by working with many small businesses that are similar to yours.

Pro: IT Strategy and Maintained Hardware/Software

One of the biggest pros for a small business to outsource IT support is that your technology environment is proactively managed. With a proactive IT service you won’t have to worry about licensing, ensuring your systems are compliant and patched on time or planning for future changes.  Your managed services team will take care of that all for you.

You will also have a senior level technology resource that will continually review (usually quarterly) your entire technology system, meet with you to understand your businesses strategy and ensure that a technology plan is in place to support your small businesses growth.

Con: The Support Team can be Too Small

Some managed services providers or IT support firms provide on one, two or three engineers – this can cause as many problems for a small business as hiring a team internally. People get sick or go on vacation and clients are prioritization can become a problem. Too few employees mean the value of diversified knowledge and experience is also lost.  When evaluating IT firms it is important to understand the team and experience of the overall organization.

Should You Outsource Your Small Businesses IT?

Like any business decision it’s important to carefully consider the impact to your business. The benefits of outsourced IT to a managed service firm can be tremendous.  The financial benefits are well documented. The opportunity cost of having an outsourced CIO and strategically aligning IT for you small business is great. Just be sure to find the right IT provider because they are not all created the same.