Internal IT Teams vs External Managed Service Providers (MSPs) – Making the Right Choice for Your Business

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Cost efficiency, access to specialised skills and technological advancements are all factors driving a rise in businesses investing in external IT services. In 2024, Statistica predicted global outsourced IT spending will reach US$541.10bn. The question is, is outsourcing IT right for your business? This article will explore the pros and cons of using an internal IT team vs. an external Managed Service Provider (MSP) to empower you to make an informed decision.

As the backbone of most modern businesses, the effectiveness of your IT operations can significantly influence your path to success.

The Key Differences Between Internal IT Teams and Managed Service Providers

When choosing your IT set-up, we recommend considering current needs and future goals. This helps to ensure you have an IT strategy that is ‘just right’, reducing the risk of insufficient infrastructure or IT overspending. 

To help, we have compiled a list of key differences between internal and external IT support for you to consider: 

Understanding Internal IT Teams vs Managed Service Provider Set-Up

In a business’s early days, an IT set-up may begin with several roles consolidated into fewer positions or even a single person responsible for all activities. 

As companies grow, teams are often divided by function, with additional specialised roles in systems, networks, security, etc.

Regardless of size, a big IT challenge for all businesses is the ROI on IT spending. Investments in people, IT infrastructure, maintenance, and security can be costly and resource-intensive.

A Managed Service Provider, such as Dr Logic, is a third-party company that provides cost-effective services to businesses via a team of IT specialists. 

MSPs are designed to support clients with a range of services remotely (and in-house), from IT support and IT projects, to cyber security , consultancy and cloud management.

Partnering with an MSP enables businesses to focus on speciality areas and business growth without the distraction and cost of running IT operations.

Range of Expertise

Internal IT:

  • Efficient internal IT teams built based on the company’s specific needs, long-term strategy and culture can provide effective, practical solutions. 
  • Expertise can be limited to a few core areas, depending on team size and training resources available. Implementing specialised or emerging technologies can be costly and slow compared to external options.

External MSPs:

  • Offer more flexibility in expertise with access to a broad pool of specialists in various IT fields, including cybersecurity, AI technology, cloud management, and more. 
  • Businesses can quickly gain expert resources for complex projects or new technologies without the delays and expenses associated with building knowledge in-house.

Key Takeaway: What does your business value more? Building in-house IT knowledge and skills or on-demand access to a broader range of expertise that can adapt to business needs.

Reliability and Availability

Internal IT:

  • Provide quick problem-solving and personalised support in routine situations but may lack expertise in complex IT issues.
  • Maintaining 24/7 support can be challenging, requiring extra staffing or costly on-call arrangements. In smaller teams, absences or turnover can also disrupt operations.

External MSPs:

  • Designed to offer continuous availability to IT specialists, with 24/7 monitoring, support, and response services built into their contracts. 
  • Operate with redundancies, ensuring a team member is always available to resolve issues despite unexpected absences.

Key Takeaway: Would your business benefit from continuous expert-led IT support to reduce downtime?

Scalability: Meeting Business Growth Needs

Internal IT:

  • Provide a strong foundation for business growth, as they are closely aligned with the company’s long-term strategy with knowledge of internal systems and processes. 
  • Scaling an internal IT team to meet growth demands can require significant hiring, training, and infrastructure investments.

External MSPs:

  • Designed to handle growth efficiently by offering cost-effective, scalable IT solutions that can expand or contract as the business evolves.
  • With a large pool of resources and the ability to deploy additional staff or technology quickly, MSPs can accommodate rapid changes such as opening new locations, adding users, or integrating new services.

Key Takeaway: Consider if you would prefer to invest internally (most likely over a more extended period) or choose the flexibility of an external partner (for a quicker transformation).

Security and Compliance Considerations

Internal IT:

  • Full control over security protocols and compliance strategies remains in-house, with processes tailored to the business’s specific needs and regulatory requirements.
  • Gaps in knowledge can occur without continuous training and investment to maintain up-to-date expertise of evolving threats and regulations.

External MSPs:

  • Provide specialised security and compliance expertise, advanced solutions, and proactive risk and compliance management. 
  • Partnering with an external provider means businesses may have less direct control over security protocols.

Key Takeaway: Sharing the responsibility for your IT security with an external provider can make business owners nervous. However, by collaborating with a trusted IT partner, you can find cost-effective and scalable security solutions designed to fit your unique needs.

Innovation and Future-Proofing the Business

Internal IT:

  • A thorough understanding of internal IT infrastructure allows teams to create customised solutions that enhance existing IT capabilities and meet business needs. 
  • Capacity for innovation may be limited by resources and budget available for research and development, training and implementation of new technology.

External MSPs:

  • MSPs are at the forefront of IT advancements like AI and cloud computing and can introduce innovative solutions to keep businesses competitive and adaptable, which may not be feasible for internal teams. 
  • However, in some cases, they may provide more standardised solutions with less customisation than an in-house team focused on a single organisation.

Key Takeaway: Internal IT teams can provide innovation-driven solutions but may struggle to keep pace with the fast-moving tech landscape. With their exposure to a wide range of technologies and trends, MSPs can offer greater capacity for future-proofing your business.

Cost Comparison: Which is More Budget-Friendly?

Internal IT:

  • Building and maintaining an internal IT team gives businesses complete control over their IT strategy whilst developing in-house specialised skills. 
  • Costs are upfront and ongoing, including salaries, benefits, ongoing training and development, and investments in infrastructure such as hardware, software, and security systems. 
  • Unexpected costs can also arise from system failures, staff turnover or short-term outsourced support. 

External MSPs:

  • Generally, MSPs provide a more predictable cost structure, typically through fixed monthly or annual fees for services such as support, management, and security. 
  • Absorb the cost of staying updated with new technology and compliance requirements and provide high levels of value with access to a range of expertise. 
  • As business needs grow or become more complex, outsourcing costs may rise, and businesses may need to negotiate or adjust contracts.

Key Takeaway: Outsourcing IT is typically a more cost-effective solution than maintaining an in-house team, hence the 38% rise in IT outsourcing from 2019-2024 worldwide. Both options can work well for businesses, but all costs (both upfront and ongoing) should be considered to determine the best value.

Making the Final Decision: Factors to Consider

As specialised IT skills grow in demand and technology rapidly evolves, it is expensive to remain competitive and agile with an in-house team. 

It’s best to consider your business strategy and long-term plan. If building IT infrastructure and skills in-house is pivotal to your success, it can be a worthwhile spend. 

However, outsourcing your IT could deliver a much higher ROI if you are focused on a different core capability to drive your company’s growth. 

You also don’t have to choose between internal and external IT services. For many businesses, a hybrid approach works best. In-house teams are supplemented with additional resources and expertise from an IT partner, working together to achieve the best results and scalability.

Experience a Different Type of IT Partnership with Dr Logic

Every business has unique IT requirements, and we are here to understand yours. We specialise in creating cost-effective IT services for our clients’ needs and ambitions. 

If you are looking to outsource your IT for the first time or even change from an existing provider, we can help you achieve IT success.

Our Mac IT services include: 

  • IT Support
  • IT Operations
  • IT Projects
  • IT Strategy
  • IT Security 

You can take the steps today to start a different type of IT partnership – one focused on collaborating with you to deliver a personalised and effective service. Contact us for a free, no-obligation call with one of our IT specialists.

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