Nearly 90% of businesses in the United States expect their information technology (IT) budgets will grow in 2020. Why? Because organizations believe that digital transformation is now a life-or-death matter for them.
When Marc Andreessen declared that software would eat the world, it didn’t seem that apparent. Fast forward to today, and it’s clear that technology is the predominant layer over every industry. For small businesses, the question is how to handle IT. Do they hire an in-house team or work with small business IT consulting experts?
To help you make a decision, here are fundamental perspectives you should consider to make the right choice.
1. The Cost Perspective
How the costs play out between the two options will vary, and the dynamics around that variation is what helps you decide which option to go with.
When you establish an in-house IT team, the capital costs go to you. All the equipment necessary for the infrastructure will be on you. And it’s not just buying the equipment that will matter – you’ll also need to factor in regular equipment upgrading costs.
On top of the hardware and software costs for setting up the IT infrastructure, you’ll still need to hire full-time employees for the function. That includes bringing in an in house IT manager and their team. Regardless of the workload they will bear, salaries will be a standing expense, as will be the other benefits you need to pay them.
Outsourcing IT many times will mean bringing on a third party to act as your IT department. How the cost works out here will depend on the nature of the consulting.
If you hire a managed services provider (MSP), for example, they come on board to cover all aspects of your IT needs. As such, they handle sourcing the infrastructure and maintaining it. Additionally, they will also manage recruiting, training, and supervising the IT staff. All you will do is pay a monthly fee for their services.
When equipment and software upgrading or staff training becomes necessary, you don’t crack open your account to foot the bill. The MSP handles that end as well.
Other IT consultants will opt to work with your existing infrastructure, meaning that you still need to pay the consultant on top of the infrastructure costs.
The costing option you choose should not necessarily be the cheapest as much as what serves your firm best.
2. The Expertise Perspective
The in-house IT team you hire comes with a variety of experiences necessary for the function. You can seek to hire different team members who have skills that complement each other for a collective breadth of knowledge.
However, you need to keep in mind that in-house IT workers will gain skills and experience tied to what they work on. As such, it’s more likely than not that each employee you hire comes specialized in one or two areas during the span of their career.
On the other hand, IT consultants spend a lot more time working with clients in various fields. Not only that, but they also experience higher rates of switching from one sector to sector when it comes to the clients they take on.
Inevitably, an IT consultant will pick up a more extensive array of experiences faster. However, because an IT consultant works with clients on periodical contracts, they may not sink as deep in understanding each field they encounter.
Thus, the question here for you would be whether you value in-depth domain experience in one area or the flexibility of a broader scope of knowledge.
3. The Strategy Perspective
Another critical yet not frequently weighed consideration is on your business strategy. If the IT function ties into a core element of your competitive advantage, hiring a full-time team means the information remains in-house.
In addition to that, the organizational culture surrounding your competitive advantage will be easier to control. That directly affects how well those working on issues touching on your core competitive approach deliver.
Outsourcing your IT function when it impacts a core portion of your competitive advantage calls for careful consideration. Hiring a consultant will mean exposing your competitive advantage to an outsider.
While you can shape contracts to ensure a contractor doesn’t spill your secret sauce, you may not control their influence on the company culture. If it happens to be negative, then how well your competitive advantage performs may be adversely affected.
However, if the contractor brings in a positive culture, it may guide you on new ways to operate that support your competitive advantage.
4. The Focus Perspective
An in-house IT team knows the terrain. They know the history and where you are trying to go. Aside from that, an in-house IT team tends to focus on the most significant issue of the day. Therefore, while such a team is focused entirely on the overarching business objective, they can be derailed when the unexpected occurs.
For example, if you have a full-time IT team that finds itself dealing with a lot of support tasks, there won’t be time for team members to be creative. Inevitably, the in-house team will need to focus on the immediate need and shelve other more strategic but long rage duties.
It’s also common to find in-house teams getting too close to a problem at hand. That can cause thorny issues to persist as they don’t have a change of perspective, operational procedures, office politics, etc.
Hiring an IT consultant helps you bring a fresh set of eyes to the table. At times, that new perspective can help your firm attain strategic breakthroughs that move the needle significantly.
External IT consultants are also not mired in internal office politics or the way you do things. Free from such biases, consultants can approach problems differently and deliver critical solutions that help you achieve your goals quicker.
In-House IT vs. Small Business IT Consulting: Which One Wins?
As a small business, you know that technology is mission-critical. However, how you adopt it is a pertinent question. Invest in learning the pros and cons of hiring small business IT consulting experts versus a full-time IT team to determine what works best for your business.
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