5 Differences Between In-house and Outsourced IT for Small Businesses

Discover the game-changing differences between in-house and outsourced IT for small businesses! From cost efficiency to top-notch support, this article reveals the key factors that can transform your business IT strategy.
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Written by Rene Mallari

Contents

Your in-house information technology (IT) support team handles customer, user, and employee technical questions and requests. The team plays a crucial role in your success, helping your organization with processes that are unfamiliar to many. 

But with the technological changes and developments in the business world, it is time for you to consider IT support outsourcing with reliable business process outsourcing (BPO) companies. 

This article discusses the differences between in-house and outsourced IT for small businesses. It covers human resources, service quality, and costs. 

Keep reading to learn more. 

1. Recruitment and Onboarding

You need technical support personnel who are experts in their field, whether in-house staff or outsourced specialists. See the differences in hiring and training IT staff for small businesses.

In-house

When employing a technical support professional, you typically look for someone with broad and relevant experience. You seek a candidate who has the following skills and proficiencies:

  • Teamwork 
  • Solid analytical skills
  • Active listening skills
  • Organization skills 
  • Attention to detail
  • Creative thinking
  • Mac/Linux/Windows OS familiarity
  • Help desk software experience

The ideal candidate should have an IT-related degree or previous technical experience. Prioritize applicants with training certificates and accreditations from well-known industry associations or companies. Reputable certifications include the following: 

  • Certified Information System Security Professional
  • Certified Information Systems Auditor (CISA)
  • Certified Information Security Manager
  • Oracle Certified Professional, Java
  • Microsoft Certified Solutions Associate
  • Cisco Certified Network Associate – Routing and Switching

During a global IT skills shortage, great hires are rare. Finding reliable, industry-savvy, and team-oriented talent requires knowledge of IT processes to properly assess an applicant’s skills. 

Technical support requirements vary by industry, so look beyond job and character references. During the screening and interview, assess the candidate’s technical skills, soft skills, personality, and qualifications. 

After the recruitment process, you must spend resources onboarding and training your new hires. You keep your hopes high that the new employees will meet your expectations. 

Outsourced

When outsourcing IT support, you no longer need to go through time-consuming and often expensive recruitment activities. The outsourced IT provider uses proven methods to hire and train qualified candidates. These methods include:

  • Advertising job vacancies
  • Pre-screening applicants
  • Conducting initial interviews 
  • Providing written examinations 
  • Conducting second (third and fourth, if necessary) interviews
  • Orienting new employees 

To provide a high-quality back-office outsourcing service, a BPO firm regularly trains agents. Its onboarding process introduces them to your technical operations and tasks. The service provider also uses tried-and-true methods and systems to expedite the process. Thus, you are guaranteed a team of experts ready for deployment. 

2. Degree of Service Quality 

The service quality in this type of back-office outsourcing depends on how well you and your IT team understand and address end users’ needs and concerns. 

Discover the differences in service quality between outsourced and in-house IT for small businesses.

In-house

A small business hires two to four full-time technical workers, including an IT manager or supervisor and technicians, to manage processes. Errors and oversights are common in small teams, especially during busy periods or when facing short deadlines and heavy workloads. 

An in-house team’s small size makes it difficult to divide and organize tasks. Support tickets can accumulate quickly. Despite the team’s skill, such a situation can degrade service. 

Technical support is a secondary but complex function. IT professionals must keep up with industry standards and technology. If you are understaffed or lagging, government regulations might cause issues.

Outsourced 

An outsourced technical support team is well-organized and splits tasks to improve productivity and service. It typically has five tiers to handle customer issues and requests. 

  • Tier 0 (T0) support. At this level, consumers can fix IT issues without agent intervention. Instead, they look for answers on your website. T0 includes search, community forums, video tutorials, blog posts, frequently asked questions (FAQs), and product or service information. 
  • Tier 1 (T1) support. Agent-assisted technical support begins here. T1 experts evaluate customer requests and offer the best solutions. They resolve 75% of common technical issues, such as password recovery and application reinstallation. 
  • Tier 2 (T2) support. This level resolves the remaining 25% of technical issues beyond T1’s capabilities. T2 teams are more expensive than T1 teams due to their greater technical expertise and knowledge. 
  • Tier 3 (T3) support. If T2 fails to resolve a customer or user issue, it is escalated to this level. T3 technicians solve the toughest problems and inform the team of new resolutions. 
  • Tier 4 (T4) support. This third-party team is not part of your outsourced IT team. Suppose a technical issue cannot be fixed. The BPO provider can turn to T4 software or hardware vendors for parts, components, products, or service replacement

To ensure quality, a service provider hires IT professionals with experience in outsourced IT trends, data security, and regulatory compliance. They are well-versed in laws and standards such as the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the General Data Protection Regulation (GDPR).

3. Direct and Hidden Expenses

Direct costs include salaries, leases, rent, supplies, raw materials, and additional payments required to run your business. Hidden costs are indirect, unpredictable, and hard to calculate. 

Explore the cost differences between in-house and outsourced IT for small businesses.

In-house

A small business needs at least three full-time IT professionals: a supervisor or manager and two technical support specialists. 

According to Indeed, the average salary of an IT manager in the U.S. is nearly $40 per hour or $6,546 per month. On average, technical support specialists earn $4,400 per month or $22 per hour. The employee’s salary increases with more experience, tenure, and qualifications. 

Overhead costs add to these professional rates. These include hiring, training, health insurance, payroll taxes, paid time off, and retirement plans. Office space, furniture, computers, supplies, and equipment can further increase financial stress.

Employee turnover and talent loss are hidden costs of an in-house IT team. Losing a regular employee is costly, but losing a manager is even more expensive. Employee mistakes and long, casual conversations further increase hidden costs. 

Outsourced

Small businesses that use outsourced IT solutions pay only for the services they use or access from a BPO provider. No full-time employees mean no regular salaries, benefits, or overtime pay. So you save money while boosting revenue. 

Third parties also offer flexible pricing models. Your total outsourced IT support costs depend on these models.

The following are some examples of outsourced IT costs for small businesses: 

  • Ad hoc fees. IT services are available whenever you need them. Costs vary with demand. This works well if you need only occasional IT support. But major technical work costs more due to service provider fees. 
  • Monitoring only. Use this plan when you need network reporting and notification only. The provider protects your IT system from data breaches, online attacks, and web threats.
  • Per-user flat rate. Instead of charging by the hour, this service fee charges per period. Your total costs depend on the number of users. This scheme is recommended for better planning. For instance, if you need 25 agents in 24 months, multiply the rate per person by 25. 
  • Per-device fixed fee. This is similar to the per-user flat rate but based on device usage. Adding or removing devices changes the price. Tracking costs is also easy. For instance, if you give each employee a laptop, multiply the fee by the number of laptops. 

4. Market Coverage and Language Support 

Consider the difference between in-house and outsourced IT for small businesses in terms of market reach and language support.

In-house

Because of its small size, an in-house IT team can serve local customers only. Thus, IT support for international customers is difficult. Moreover, agents are restricted to users who speak the same language. 

Customers or users might also need technical support outside of the nine-to-five workweek. IT emergencies might occur when your staff is unavailable. But asking your team to work after business hours on holidays requires overtime and holiday pay. 

Outsourced

BPO providers can provide a 24/7 IT support team. Consumers reach the team 24/7 via email, mobile phones, live chat, and social media. 

With broader market coverage and accessibility comes the opportunity for overseas expansion. When you outsource tech solutions, your small business can serve consumers internationally. 

Below are the benefits of a wider market reach:

  • Access to diverse technical talent. A global supply of IT professionals with different technical skills and languages is available. Hiring them can improve overall performance and output. 
  • Fewer obstacles when exploring new markets. You can experience higher revenue and market growth with international technical support services. Your sales and income are no longer constrained by a single physical location or dependent on the local market demand. 

BPO companies can also offer multilingual IT support with specialists fluent in at least two languages, including English, to serve the needs of global customers. 

The perks of multilingual support include:

  • Product or service enhancement. The third-party team receives requests, comments, and reviews from consumers worldwide. You can gather relevant data and gain insights to improve products or services. 
  • Potential to expand sales. Non-English-speaking customers prefer interacting with help desk agents who speak their language. If the language barrier is low, agents are more likely to sell extra products and services.

5. Control, Response, and Knowledge

In-house and outsourced IT for small businesses differ in supervision, response time, and expertise. Let us look at the details below. 

In-house

Your in-house team can:

  • Help you maintain greater control. You have more supervision over response time when technical support is under your wing. You can train the team in the specific solutions or skills required while keeping costs within the budget. 
  • Address issues quickly. Emergency or major technical disasters require immediate action. Your in-house team can respond quickly due to its proximity. A quick phone call or online message to the department gets employees working on important tasks. 
  • Understand your computer systems and employees better. Your in-house team spends over 40 hours a week operating, analyzing, maintaining, and improving the infrastructure. So they know your platform best and also understand their coworkers’ technical needs. 

Outsourced

In contrast, an outsourced IT team can:

  • Result in less management control. Technical support outsourcing might reduce administrative control. Your internal policies, style, and methods can be marginalized, revised, or abandoned. The service provider handles outsourced tasks using its proven methods and systems.
  • Misinterpret issues at times. Outsourced technical support might be unfamiliar to your internal processes and employees. It might occasionally misunderstand things that can cause costly errors. 

The Bottom Line

IT support outsourcing is a type of back-office outsourcing worth considering. Learning the differences between in-house and outsourced IT for small businesses helps you decide whether to use this strategy. 

While outsourced IT offers more benefits than running an in-house team, the choice is up to you. No matter the apparent advantages on paper, you need thorough consideration to know which strategy is right for your case.

Before you outsource data entry services, technical support, or customer service, you should be careful and do more research. You can also use both strategies: outsource some of your IT processes while retaining the in-house team to deal with more important tasks. 

Unity Communications
At Unity Communications, our mission is to consistently assist our clients in growing and achieving success while providing superior leadership and customer service. Our team of over 350 onshore, nearshore, and offshore BPO agents caters to startup clients and Fortune 500 accounts alike. More than 50 U.S.-based companies leverage our expertise to run, grow, and scale their operations
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