Should I Rebuild My Internal IT Staff or Should I Outsource It?

By Tom Stanton

This is a great question and one that many small to medium-sized businesses are asking themselves. As you can imagine, the answer is not as simple as you might think. Many business owners want control and believe it is best achieved by having an employee on staff. Others want to focus on what they do best and hire professionals to handle the other areas. Still others like to have a mix, keep the day-to-day and routine support in-house, and bring in outside vendors for specific specialty projects. This is great debate that not only occurs in the small and mid-size market place, but is very much alive in the enterprise space as well.

The economy has taken a toll on all of us, some more so than others. If there is a silver lining in all of this, it is that it has forced us all to look at business from every angle. We now have to look at different methods and how we handle our internal operations. The economy has a long way to go before it recovers, but the businesses that will succeed are the ones that hire correctly and stay lean. The important question to ask yourself is: do I want to hire people to handle non-billable internal operation roles or billable sales-focused revenue generating roles? If you answered internal operation roles, then you will want to keep your IT staff internal; if you answered revenue generating roles, then you probably want to outsource the internal operations. This is not limited to IT, but includes HR, customer service, and other roles that are not part of generating revenue for your company.

The enterprise space has started to move away from having in-house IT staff and is starting to look at outsourcing. They control this by having vendor managers instead of technical resources on staff. These vendor managers hire, evaluate and manage the outsourced vendors to ensure that the company is getting what it paid for.

You may be thinking you were only considering hiring one internal IT employee, not an additional employee, a vendor manager. A vendor manager role is not necessarily a full time position. Often the CFO or Controller can take on this role. The important thing is that whoever takes on this role needs to be educated on how to be a vendor manager. I believe that, above all else, a vendor manager’s role is to make sure that the vendor does not hold the company hostage. Unfortunately, I see all too often where a company is unhappy with its current IT support, but has not done a good job of documenting its system. This has put them at the mercy of the vendor and they are too scared to leave them because they don’t have proper access to their own system. This responsibility falls squarely on the vendor manager’s shoulder. I can’t stress how important this role is if you are outsourcing your IT department or any other department.

Now you may be asking, when is a good time to keep my IT staff in-house?  According to Gartner, the average number of end users per IT support staff is about 70:1. This can vary greatly in your organization depending upon the complexity or simplicity of your technology. It is my belief that, because of the ever-expanding technology, world experts in each area are typically needed. This often limits the ability of one person to handle all of an organization’s technology. Therefore, until you can bring four to five technical resources in-house, it is very hard to compete with outsourcing companies from an expertise and a value perspective. If you outsource to a reputable IT firm you will have access to different levels of expertise. This will allow your organization to grow and not be limited by the expertise of just one or two internal technical resources.

In conclusion, there is not enough time in the day or pages in this magazine to complete the in-house vs. outsourcing debate for your IT department. However, I hope I have given you some valuable information to make a more informed decision. I believe that both models can be and have been proven successful. The major problem with in-house vs. outsourced is finding the right fit, be it employee or vendor. I will leave you with this: Are you better at hiring employees or vendors? And if you make a bad decision, which is easier to replace?  

About the Author
Tom Stanton is the co-founder with Rolland Lucas of BrixTec. BrixTec is an IT Outsourcing and Web Development Company with Microsoft Gold Certified Partner status.  Tom was a member of the Tampa Bay Business Journals 30 under 30 Class of 2007 and a finalist for Tampa Bay CEO Magazine CEO of the Year in 2007. He has been involved with the New Tampa Rotary club since 2004 and received the Rotarian Rookie of the year award, and served on the New Tampa Rotary Board of Directors.    Tom can be reached at tom.stanton@brixtec.com  or www.brixtec.com