In-house vs. outsourced IT: what makes the most business sense?Building the right in-house IT team requires patience, diligence and a clear understanding of the skills a company will require in the long term
In the modern age, businesses of every kind have a wide range of IT requirements, including website design, search engine optimisation, online marketing, graphics, social media engagement, and customer resource management.
Human resources, accounting and customer service also have increasing IT dimensions, and the whole network needs to be constantly managed and maintained.
Of course, security is also a major issue for all companies. Without specialist staff, ever-mutating viruses, spyware and malware can easily slip past cyber-defences that were previously considered entirely satisfactory.
>See also: The real cost of outsourcing IT
So there is no argument that IT specialists are not required. The question is whether to hire a full-time, in-house team, or contract out and bring in experts only when needed. There are pros and cons to each approach, which are summarised below.
The benefit of this approach is that a company can bring in someone with a very specific skill set to take on a particular task. Once that task is accomplished, they may not need those particular skills again, so it makes sense to hire the specialist only for the duration of the project.
This makes financial sense and also means that a company can bring in a specialist absolutely focussed on the issue at hand, whereas a full-time employee would likely have a more general set of IT skills that could be applied to a variety of situations.
When a company outsources, it also doesn’t need to invest in the equipment or software necessary to do that particular job. The contractor will either provide their own tools or they will include the cost of acquiring the equipment in their fee, which will be less than if the company bought the equipment outright.
The disadvantages of outsourcing start with the fact that a freelance IT contractor can command a much higher hourly rate than an in-house operative. It can also be both difficult and time consuming to find someone with the right skills at the right level who is also trustworthy, affordable and available when needed.
Sometimes, as well, companies just don’t know what to look for. In time, any company will build up a book of contacts they can rely on for outsourced IT work, but this will need to be constantly updated. Outsourcing agency fees should also be considered.
Building up an in-house IT team means that they can be trained to the company’s specific needs, and they will always be available when needed. This can be especially invaluable when an emergency arises, such as a security breach.
In such a case there is no time to look for a specialist, call them and be told they can fit you in next Monday. The situation needs to be locked down immediately, and the damage dealt with.
With an in-house team, the company can ensure they are trained to the requisite level and, via exclusive contracts, can hang on to any star performers whose work differentiates the company from the competition.
For instance, if a company’s website stands out due to its unique design, it is hardly in their interests for the designer responsible to be doing similar work for twenty other companies.
The cons to building an in-house IT team can mainly be seen in terms of initial financial outlay. Finding the right people and training them can be a costly and drawn out affair. The training never stops either, as they will need to constantly update their skills and knowledge, gain certificates and so on.
Of course, they will also need to be kept on a regular salary with employee benefits. If these employees have in-demand skills at a high level, which they should, then they will need to be paid at a very competitive rate in order to keep them within the company.
However, the principle that you get what you pay for is no reason not to go down this route. In-house employees will also have a greater personal investment in making sure the job is done right and will be more likely to go the extra mile and provide exemplary service.
They also know exactly what is needed and are familiar with all aspects of the company. While an outside contractor can be brought up to speed, this takes time, which needs to be paid for.
Also, some details that might seem irrelevant at the time could prove crucial if omitted. With an in-house specialist, costs can be kept under control, and expenses won’t suddenly balloon, as they will remain on the same salary with whatever work they are required to do.
Companies such as World Escapes have found that keeping an in-house IT team works for them, but insurance firm Hiscox felt that outsourcing a variety of roles is the most economical way for them to progress. It is clear that there is no one-size-fits-all solution to this dilemma.
A hybrid approach
Ultimately, most companies opt for a mixture of both approaches. An in-house IT team is essential to some degree for all but the smallest companies. These may be focussed on customer support, security, online marketing or any other IT area that requires constant supervision.
Outside contractors, like graphic designers or problem trouble-shooters, can be kept on-call. Recent studies suggest that media buying and digital marketing are being handled increasingly in house, while other less crucial and perhaps more esoteric roles can be outsourced.
Building the right in-house IT team requires patience, diligence and a clear understanding of the skills a company will require in the long term. While outsourcing may seem a more immediate, cost-effective solution, taking the major roles in-house will undoubtedly prove more efficient over time.
What is clear is that as IT becomes more central to the running of any successful business, more companies will realise that they need to have experts in various IT fields working for them full-time.