IT Outsourcing in 2024: Key Considerations for SMBs

As a savvy business leader, the idea of IT outsourcing has likely crossed your mind – tempted by its promise of slashing costs and keeping your business compliant. It’s an enticing prospect, especially for small and medium-sized businesses (SMBs) looking to grow without breaking the bank. But wait! Before jumping in, it’s important to note that IT outsourcing is not a one-size-fits-all solution. Stick with us as we explore whether a managed service provider (MSP) could benefit your business and how to select the perfect partner if you choose to move forward. 

What is IT outsourcing?

IT outsourcing refers to the process of transferring some or all your internet technology (IT) systems and processes to a managed service provider. Businesses of all sizes use IT outsourcing to supplement or replace an in-house IT team. It’s an easy way to add top-tier IT talent without the hassles of hiring, onboarding, and payroll. Most MSPs integrate with your business to oversee your IT needs for a nominal monthly fee. (Google Snippet)

Why consider IT outsourcing in 2024?

The relentless surge of technological innovation in recent years represents both an opportunity and a challenge for businesses. Organizations that keep up with current trends often gain a competitive edge. Agile SMBs are at an advantage here, as they can adapt faster than larger competitors.

On top of that, post-pandemic economic pressures have many businesses feeling the pinch. Rising inflation can trickle down to every aspect of a company. SMBs are often susceptible to these trends, and routinely face challenges like budgetary concerns and hiring freezes.  

Outsourcing IT is one strategy SMBs use to address these and other factors. Keep reading to see why some businesses may benefit while others may choose to keep IT in-house. 

The pros and cons of IT outsourcing for SMBs

There are many reasons why SMBs may choose to outsource IT to an MSP, but that doesn’t mean it is always the right choice. Let’s explore both sides of the equation. 

Top reasons to outsource IT:

• Cost savings and new technology: 52% of IT teams recently noted that cost-effectiveness is a top business benefit of working with an MSP. Plus, MSPs typically offer a predictable monthly service charge, which means you gain access to cutting-edge technology without added accounting complexity.
  
• Scalability: A good MSP can scale their services as your business grows and changes, letting you avoid investing in additional costly infrastructure.
  
• Focus on core business: Offloading your IT needs frees up your team to focus squarely on their area of expertise and strategic and revenue-generating priorities. 

Top reasons to keep IT in-house: 

• Control and customization: Maintaining an in-house IT department can let you tailor your technology stack more precisely to your business needs.

• Responsiveness: In-house departments can be more responsive and resolve IT issues more quickly since they are fully integrated members of your team. 

• Strategic alignment: Keeping your operations in-house may enable your technology stack to stay more closely aligned with organizational goals and objectives. 

Ultimately, your decision must come down to your company’s complexity, needs and structure. If after you weigh these pros and cons, you decide on outsourcing, there are other considerations to take into account. We’ll explore those now to ensure you select the right partner. 

Top considerations when outsourcing IT

Of the many factors to consider when choosing an MSP, here are some of the most important:   

• Assess business needs: First, ask questions about your needs. Do you need an MSP to fully manage your IT or supplement your in-house department? Will you need 24-hour service? If you plan to grow, will you need onboarding support? Then, inventory your current IT hardware, software, and network components. Do they meet your requirements or need to be replaced? These questions will give you a better idea of what you need from an MSP.
  
• Analyze provider capabilities: Review prospective MSP experience, pricing, contract limitations, and services. Using a professional to help you craft a request for proposal (RFP) is the easiest way to select a qualified provider. Search for companies by using directories or by seeking recommendations from trusted business contacts. Look at providers’ websites, reviews, case studies, and more for additional insights. 

• Understand cost and pricing structures: Verify MSP cost structures to ensure they meet your budget while offering flexibility as you grow. Additional questions to ask include:
  
  • Pricing models – Do they offer a range of service plans? 
  • Cost transparency – How forthcoming are they with their fees? 
  • Additional services and costs – Do they charge for on-site support or consulting services? 
  • Return on investment – What is the average ROI for working with the provider? 
  • Customer support – What support is offered within each package and plan? 
    
    
• Security and compliance: If you work in a regulated industry, inquire how providers will help you stay compliant. Beyond this, ask how they’ll secure your data and keep your SMB safe. Some specific topics to address could involve:
  
  • Firewalls 
  • Antivirus software 
  • Routine security audits 
  • Multi-factor authentication 
  • Intrusion detection systems 
  • Software patch management 
  • DNS protection 
  • Security awareness training

It’s also appropriate to ask providers for their relevant security certifications. That way, you’ll have a comprehensive picture of how they’ll protect your SMB.  

• Service-Level Agreements (SLAs): Lastly, ensure you understand the SLAs offered by prospective providers. These agreements define the terms and conditions of your contract and serve as an important document for your partnership. Here are a few areas to keep an eye on: 
  
  • Breakdown of responsibilities 
  • Levels of support 
  • Scope of services 
  • Response guarantees 
  • Service performance metrics 
  • Availability for extended hours

Any SLA you’re considering must have clear conditions and transparency around limitations. That’s one of the best ways to decide whether a service provider is right for you. 

Is IT outsourcing right for your SMB?

Outsourcing IT to an external partner isn’t a simple process. It takes research and analysis to decide if it’s right for your SMB and to find an ideal provider. By following this guide, you can make a more informed decision.  

Ready to talk about adding an outsourced IT provider? We’re here to help. Schedule a call today!

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