In-House IT Staff vs. Managed IT: Cost

Smart business leaders understand the importance of their IT infrastructure. The problem is that when it is operating efficiently, it’s easy to get lulled into a false sense of security and assume that it can operate well indefinitely with little to no attention. 

In the same way that people need care and feeding (and maybe an occasional doctor visit) to stay healthy, IT infrastructures need attention and care to remain at peak health. Without ongoing health checks, the network can become susceptible to viruses (and worse).  

So, how to get essential care for your IT network becomes an important question. 

I’ve worked in IT for more than 20 years. As president of Kelser Corporation, a managed IT provider, I obviously have a bias toward managed services. But I also know that, as with most things in life, there is never one solution that is right for every situation. I know managed services might not be the right solution for you.  

So why am I writing this article? I know it’s important to have all of the facts when making important business decisions. This article will give you the information you need to help you make this critical decision that will affect the safety and efficiency of your organization’s IT.   

In this article, I’ll provide an unbiased comparison of managed services and in-house staff based on cost. 

After reading this article, you’ll understand the advantages and disadvantages of each solution and will be armed with the information you need to make the cost decision that is right for your organization. 

In-House IT Staff Vs. Managed Services:  Definitions

Just to make sure we are all operating from the same basic understanding, let’s define managed services and in-house staff.

In-House IT Staff

In-house staff refers to a full-time complement of IT professionals who work as dedicated employees of the organization to provide support for its network and users. As employees, the in-house staff maintains the network, provides devices and support, and delivers training for users. The in-house staff calls on external resources as needed (typically a break/fix provider) to supplement the skills and time limitations of the internal staff. 

Managed Services

Managed services providers (MSPs) are IT support organizations that provide IT services (covering everything from firewalls to access points, devices to networks, and more) for an ongoing monthly fee. These services often include cybersecurity awareness training for employees, as well as strategic IT advice, guidance, and resource coordination.

In-House IT Staff vs. Managed Services: Cost

If your organization is like most, cost is an important consideration, so let’s get right to it. 

In-House Staff

Pros

1. IT Budget vs. Overhead Costs

One of the benefits of an in-house staff is that you have employees whose livelihood depends on their ability to nurture and protect your IT infrastructure. Their salary may be a line item in your IT budget, but the other associated employee cost burden may be absorbed as part of your organization’s overhead budget.

2. Department Chargebacks

Some organizations charge internal different departments for the services provided by the IT staff. This can be an effective way of sharing the cost burden. 

Cons

1. Hidden Costs

There may be intangible costs that aren’t readily apparent when you consider the cost of hiring in-house IT staff. The hidden costs can include IT staff training, benefits, retention, hiring, and compensation for time off.

2. Salaries

With the appropriate (and necessary) certifications, many IT professionals earn six-figure compensation. 

When you think about all of the different skills you need to maintain and upgrade your IT infrastructure, devices, provide user training, fix broken hardware, and manage service calls, the cost quickly becomes prohibitive for many organizations.

3. Supplemental Costs

With limited staff (and therefore limited skills available in-house), there may be additional services that need to be purchased from outside vendors (like break/fix providers). 

Managed Services

Pros

1. Fixed Cost

When you sign with an MSP, you know that your cost for the service will be a predictable monthly amount. This makes budgeting easier and more reliable. 

2. Strategic Planning

When your business plan calls for significant growth, an MSP will help you plan for not only the changes your IT infrastructure will need to accommodate the change, but also the budgetary requirements. 

Many MSPs will spread the costs of significant network improvements over time, to make the cost more manageable, while still giving you the IT capability you need today.

3. Staffing 

The costs (and headaches) of hiring, retaining, training, and certifying staff lie with the MSP. 

Cons

1. Cost

There is a perception that MSPs are more expensive. That may or may not be the case. Let me explain.

Depending on the size of your organization, the scope of the services being provided by the MSP, the complexity and age of your network, the price to work with an MSP varies.  

Because MSPs handle everything you need to keep your infrastructure operating at optimum security and efficiency, there are costs included in your MSP contract that may fall elsewhere when you have an on-site IT staff. For example, license fees for each user are figured into the overall MSP cost. 

2. More than You Need

If you work in an organization with five or fewer people that is a non-technical industry, you may not need all of the services that an MSP has to offer and the cost may outweigh your need for IT support. It’s important to know what you need and find the right solution for your business. 

When looking at costs, it’s important to be sure you are comparing apples to apples. The cost of in-house staff alone may seem to be less than the monthly fees charged by an MSP, but make sure to account for any services that may be outsourced to a break/fix provider by your in-house staff. They may not appear as a clean line item and will vary from year to year.

Which IT Solution Is Right For You? 

This article provides a comprehensive look at two different IT solutions. Whether you decide that an in-house IT staff or MSP would work better for your organization, you now have important information about the cost of each.  

Not so very long ago, a small, family-run, cash-only business might have been able to operate without technology. But in today’s business world, where credit cards are used for everything from coffee to furniture, it’s become nearly impossible to operate any kind of a business without a robust IT infrastructure. 

So, how you ultimately decide to care for your network will depend on a number of factors including the size and complexity of your business. 

If you work for a large organization with sizeable monetary resources, you might be able to hire a full complement of in-house IT staff. But, with more than a 10 percent turnover rate and salaries that can quickly jump to six figures with the right certifications, hiring an internal IT staff quickly becomes something many businesses can’t afford.

If you work for a very small organization with five or fewer employees, an MSP might not be the right fit for you. 

The important thing in deciding how to best support your business infrastructure is to understand your current state, identify the things you’d like to be able to do with the right IT support, think about your budget, and start asking questions. 

Considering working with an MSP, but concerned about the cost? This article will let you know what to expect: How Much Does Managed IT Cost? What’s Usually Included?