CONDUIT NEWS INDUSTRY INSIGHT
		In-House IT vs. Outsourcing: Important Considerations By Dan Tully, Executive Vice President, Conduit Systems, Inc. As small companies grow, their investment in technology becomes more crucial. The wrong decisions can often have a detrimental impact on the organization's ability to grow internally as well their ability to effectively service customers and vendors. On one hand, finally having an in-house IT guru can allow you to free up precious time to devote to the business, let alone the other employees that have had to wear different hats up to this point. On the other hand, outsourcing your IT department or various components is sometimes easier to budget and manage. Where you draw the line in terms of continuing to handle IT in a piecemeal fashion or taking the leap of faith and hiring your first full-time IT manager is debatable. However, putting some quality time and thought into the decision-making process can make that decision an easier one. Here are some key factors to consider: Salary One full-time IT employee requires a minimum of $50,000-$70,000 salary as well as benefits and bonuses, etc. - all to support your desktop systems and the necessary servers. Having a full-time manager devoted to your computer systems will benefit you and your employees. However, the appropriate outsourcing may cost the same-or less-but comes with more personnel, talent and management attached to that price. Direct vs. Hidden Costs Outsourced IT typically has a direct and predefined cost associated with its implementation. Projects, initiatives and self-contained tasks involve both time and financial limitations that the service provider must abide by and ultimately be held accountable for. Salaried IT establishes its own schedule, effectively burying costs in payroll-expenses remain constant while staff gets redirected from day-to-day support issues. Schedules and milestones become subject to vacation, sick time or some unforeseen support crisis. Equipment Full-time IT requires its own equipment-often necessitating upwards of $10,000 in expenditures. Make sure your budget is able to handle the increase. Most of the time, outsourced support providers will supply their own equipment, freeing up the overhead cost. Space Ask yourself, “Where am I going to put this person and should I wait until our office expands?” IT departments and personnel require office space, let alone the equipment that comes with it. Upgrades Be aware that IT departments need to maintain tech support plans with various software manufacturers which can cost thousands per year. Most outsource firms include this expense in the cost of doing business and spread those costs across their entire client base. Skill Sets Given the fluctuations within the IT labor market, it is becoming more challenging for companies to predict needs. Oftentimes, the newly hired full-time manager is limited in his scope of business development experience, specialization and industry nuances. Consider: is it critical that you spend the time finding the right person or are you at a point where the job can be handled by a team of contracted managers? Professional Development Full-time IT requires constant education and training to remain up-to-date with emerging technologies, which can often cost thousands of dollars. Decide whether or not it is worth the cost of investing in the person's development to benefit the company. Specialized Projects Avoid hiring a full-time IT professional just for a specialized project. Since outside consultants are often brought in anyway, the work required may simply be included in the consulting services. Beware of “Leap-Froggers” After months of hands-on experience, many IT professionals “leap-frog” to the next challenging job opportunity. Keep this in mind as you ponder investing tens-of-thousands of dollars in this hire. Sometimes, a company will end up spending more in time and money because of frequent turnover. Work Load Do you really need someone there all the time, or just on-call? Work loads fluctuate. Some days are slow, some are incredibly demanding. Contracting with an outside firm may be better suited to addressing the ebb-and-flow of demand. Outsourcing can begin from day one. The very essence of outsourcing is the flexibility it affords an organization in terms of aligning needs with budget considerations. Most businesses don't survive if the technology infrastructure is weak or unorganized and doesn't grow as the business develops. Whether you need to hire or outsource, the decision can only be made after looking at all the options and weighing the risks and possible outcomes. << Back to Industry Insight © 2006 Conduit Systems, Inc. All Rights Reserved.