The process of utilizing IT in an institution is vital because it helps the institution serve its mission. However, with the ever-rising costs of IT service and peripherals, it becomes hard to decide whether to put in-house or outsource IT. Outsourcing will save you money, but it may cost you in terms of quality, while in-house could be beneficial as it can help support your staff and provide continuity with their knowledge. What is important, though, is that both options should ultimately be decided on with the institution’s budget in mind. This blog shares some of the upsides and downsides associated with in-house and outsourced IT services.
Benefits of In-House and Outsourced IT Services
In-house IT Services:
In-house IT services refer to the IT services that people from within your organization provide. It is usually the way to go if one wants to get things done without the hassle of finding a third party for your IT service needs. Here are some benefits of in-house IT services:
1. Saves on IT service and infrastructure costs:
Since in-house IT staff are working for the organization, you do not have to spend money on finding a third party for IT service. One also does not need to worry about continuity as in-house IT staff will always be able to continue with their knowledge and skills.
2. Saves on Management costs:
When one hires an external IT service provider, they also hire an external management team that oversees all of this process. However, when one hires in-house IT staff, the management costs are cut out. Therefore, this shows that the management costs can be reduced significantly in the long run.
3. Fast Turnaround Time:
Suppose one is experiencing an IT problem and wants it to be resolved as soon as possible. In that case, outsourcing may not be a viable option as it takes time for an external team to respond to the issue and make a decision that will hopefully resolve the problem quickly. However, in-house IT staff can easily address any concern because they are always available.
In-house IT staff can easily be changed to meet the organization’s needs. They can be assigned to other areas or moved around as the institution sees fit. This allows the institution to have a fully functioning IT department without the hassle of locating an external staffing agency for your IT needs.
Outsourced IT Services
Refers to IT services that a third party outsources. Usually, an outside company or organization usually provides the IT service. Outsourcing IT services can be beneficial for a number of reasons, including the following:
1. Cost Effective:
A big reason why many institutions opt for outsourcing their IT services is because it is cost effective and convenient. Outsourced IT services are usually cheaper because outsourcing companies enjoy economies of scale, and most companies already have the infrastructure for IT available to them. It is also more convenient because the institution does not need to worry about hiring in-house staff and finding a way to maintain their knowledge.
2. High Quality:
While saving money is essential when choosing an outsourcing company, it is also vital that one gets high-quality service instead of saving some money by working with a low-quality IT company. Therefore, one should ensure that the outsourcing company they choose is known to provide high-quality service. Evidently, the high quality that is offered is very essential.
3. Access to Industry Expertise:
When one outsources their IT services, they are not just outsourcing the service. Instead, they are also getting access to industry expertise. This means that the outsourcing company knows about every aspect of providing IT services, whether hardware or software installation or maintenance and repair. This allows the outsourcing company to be able to make swift and timely answers to any IT service matter that one will ask them.
When one hires an external IT service provider, they are recruiting from a pool of people that they can work with. However, when one works in-house, the IT team is only composed of the people working for the institution.
Downsides of In-House and Outsourced IT Services:
1. Potential for conflicts of interest:
It is essential that one works with a third party that is not also providing IT service for the institution and has their independence. This ensures that the relationship will remain unbiased and objective. However, when one works with an in-house IT service provider, it is possible that they may have a conflict of interest because they are also providing IT services to the institution. In this case, the institution is exposed to potential problems because there is a possibility of favoritism and other issues that arise from an internal service provider.
2. Salary Costs:
Since the salary and benefits of in-house IT staff are internal costs, institutions may end up paying more for IT services by using in-house staff than if they hire an external company. This is because the third-party company does not have to pay for benefits that are provided within the institution but must still provide high-quality service to their client.
3. Internal Training:
When one hires an external IT service provider, they are responsible for training the staff. However, when in-house IT staff are hired, they must either be trained internally by their own staff or outsourced to an external team that is also providing services to the institution. This is again something that may cost the institution more money.
When one outsources their IT services, they are putting the responsibility of their IT issues in the hands of their service provider. The institution is therefore not responsible for resolving IT issues that arise later. This means that if something goes wrong with an outsourcing company, educational institutions will not be accountable because they have already turned over responsibilities to another company and cannot reasonably expect them to resolve problems in a manner that they did not cause.
When one hires an external IT service provider, they are responsible for training the staff. This may also cost the institution more money than if they just outsource their IT services.
3. Reliance on Third Party:
When one hires an external IT service provider, they are hiring an outside company and are therefore relying on their abilities to provide high-quality service in a timely manner. This can be risky for institutions because if the IT service provider does not have the requisite knowledge or expertise to provide high-quality service, the institution will be at a loss.
When one works with an internal staff member or an external company, they are not always available to meet the institution’s needs. This means that system downtime is possible if they are unavailable.
Institutions require either an in-house IT department or an external company’s services to cater to their IT needs. However, several institutions have moved away from hiring external companies to providing their own IT services. This has also prompted a number of institutions to move away from outsourcing their IT services as well. In general, a firm needs to consider all the basic entities and attributes that provide the institution an upper edge in securing given IT services.