In-house IT services means that a business staffs its own IT department and handles whatever IT services are required for the business to function.
Managed services refers to contracting with a specialised vendor, who provides some or all of those IT services in exchange for a flat monthly cost.
There are other factors that can vary, such as whether that contract includes hardware and software updates or whether an organisation will split its IT needs between an in-house team and a managed IT service provider. In any case, the basic difference is whether your own staff manages its IT needs or a external partner does so.
The managed services model delivers numerous benefits to businesses, and when executed well by established and professional MSP, it delivers significant value to many organisations. Consider whether the following benefits would improve your business operations or your relationship to IT, and use these to determine the key questions to ask when choosing a Managed Service Provider.
While nearly every business today is in some capacity a technology business, for most, IT support services aren’t the core business itself. In other words, there’s something that your business is really quite good at doing. It’s the thing people pay you for and the reason you’re in business, and it isn’t IT.
Partnering with an MSP for IT managed services gives businesses the freedom and focus to concentrate effort on what they do best — without the distraction of handling every IT issue that pops up.
Hiring for specific skilled IT roles is always challenging, and especially so right now. Should your business need to quickly expand your IT capabilities, the “quickly” aspect is the hardest part. You have to find, interview, hire, train, and onboard new staff — and that’s if you can find them to begin with.
A managed service provider already has that experienced staff in place. It also has much greater capacity than the typical business, allowing rapid scaling of IT resources.
One of the biggest benefits of managed service providers is the stabilising and predictability of costs. In most arrangements, the client organisation pays a set, agreed-upon monthly fee to their managed service provider. Extra, unpredictable costs like training, certifications, hiring, and even vacation and sick time are borne by the managed service provider.
Yes, those costs are in essence baked into the monthly fee, but this is still advantageous to many businesses because it is predictable and can be more effectively budgeted in business planning cycles. For cashflow conscious or constrained businesses, this predictability enables better, more stable operations.
Managed service providers deliver workers whom you do not need to train: that training is instead the managed IT service provider’s responsibility. Considering that more than 50 percent of Australians changed jobs within the last four years (roughly 21 percent in less than one year!), you’re facing a significant number of new hires that need training and onboarding. That’s time your managers could use in other ways if you switch to the managed services model.
Most organisations will encounter specific IT needs that go beyond the skillset of their in-house team, but for which it would make no sense to hire a full-time (highly paid) resource. Imagine a one-time, three-month project requiring three distinct advanced skills— skills you won’t need again for months if not years.
Working with an MSP means gaining access to their deep roster of skills and specialisations without the need of worrying who’s being paid what.
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While the managed services model delivers numerous benefits, the in-house model has its own set of advantages.
One perceived advantage of maintaining your IT operations internally is the time or distance involved. When something breaks or goes offline, your internal IT team can (in theory) jump into action immediately to solve that problem. An MSP is at least a phone call or message away, and problems requiring an on-site visit may take longer to resolve. This is often addressed by offering a Desk Top support service as part of your MSP agreement.
Control — or at least the sense of control — is a second related benefit. Simply put, you have more control over your own employees than you do over those at an MSP. You may be able to demand overtime from in-house personnel that is not included in an MSP’s SLA. You can better control access to data and the risk or exposure that comes from working with a vendor. And you can simply have ownership over the problems and solutions for any IT problem that crops up.
However, be aware that this control is a double-edged sword, as we’ll discuss later on.
The larger and more tech-heavy your business, the more complex your IT systems will become. And while any quality MSP can learn those systems, it’s reasonable to conclude that a veteran in-house team will have a deeper, more intimate understanding of those systems.
Both the in-house model and the managed services model have clear advantages, so how should your business approach deciding which model is better?
Many of these attributes exist in balance with one another. The decision of which model to follow usually comes down to which advantages are more important to a given organisation. Let’s examine several of the areas already discussed, along with a few additional areas, and see how the two approaches compare.
Your in-house team is inherently limited. No matter how large your company, there will be specific skills and roles for which you have just one qualified resource. When that resource gets sick or goes on vacation (or quits!), that work simply doesn’t get done.
Depending on your structure, you may also face situations where you need a particular skill after hours but are not able to reach or compel your qualified employee.
And, as previously discussed, many organizations are struggling with finding and retaining personnel that cover all the IT skills and disciplines they need.
In contrast, the MSP model delivers exceptional flexibility and availability. After-hours support is available (so long as it’s included in your SLA). And because MSPs support multiple end clients, they tend to have a deeper bench across all relevant skills and specialisations.
Working with an MSP means that scaling your IT operations is as simple as an SLA adjustment. So long as you work with an MSP of sufficient size, your MSP will never be an operational bottleneck. Better yet, the additional resources assigned to your contract will arrive vetted and already trained.
The in-house model struggles a great deal with scalability. If your IT needs are relatively fixed or grow quite slowly, then this may not be a concern. But if you’re growing quickly or have the need to scale up or down quickly or regularly, the managed service provider model has the clear advantage here.
The nature of your business has a lot to do with the skillsets you need for day-to-day IT operations. The more diverse and complex your need for skillsets, the harder it is to keep them all covered internally.
If your IT needs are simple and static, the in-house model works well. Similarly, if your needs are complex but make up most or all of your core business, you may opt to keep those skills in-house.
However, there are at least two scenarios where a managed IT service provider wins the skillset discussion. One is having only occasional needs for advanced skills: it makes little sense to pay a highly skilled employee to do lower-level tasks 11 months out of the year, so the MSP model is preferable.
Additionally, organisations that need a diverse skillset but where IT is not the core of their business are strong candidates for the MSP model.
To sum up, on the question of skillsets, almost all businesses will find success with the MSP model. Some may manage adequately with an in-house (or in-house and occasional specialist contractor) model, and a select few tech-centred companies will do better to keep IT in-house.
One additional consideration: some organisations take a hybrid approach, where they utilise an in-house team for lower-level day-to-day IT needs but enlist a managed service provider to handle more complex tasks.
Many organisations find their overall costs when choosing a managed service provider to be lower than the costs of maintaining a full-service in-house team. Now, pure cash savings ought not be the primary driver here: “you get what you pay for” is as true as it’s ever been, and a bargain-basement managed IT partner rarely ends positively. But on balance, the MSP model is often more affordable.
In-house hiring brings additional costs beyond the salary figure: benefits, leave, training costs, the costs associated with recruiting and hiring, the equipment and utilities and even floor space an employee needs to do their work— these all carry costs.
Managed services providers must cover these costs for their employees as well, but the economy of scale kicks in: as you are not the MSP’s only client, those costs are spread out and felt less.
Predictability is the other cost consideration: turning your entire IT spend — hardware, software, resources, and more — into a predictable monthly rate will make your accountants smile and protect your cash flow.
In-house, your resources are exactly what they are: whomever you’ve hired and whatever they know how to do, those are the resources you have.
Managed services providers must be positioned to meet the needs of a diverse client base. As such they are quite likely to have additional resources and capabilities beyond what you’re using at a given moment. Adding capability or capacity is as simple as an SLA adjustment.
The in-house model tends to be more agile, so long as you have access to the skill required to solve the problem. MSPs serve multiple clients and may at points be required to queue requests.
However, the trade-off again comes back to the level or quality of that support. You may not get as quick as a response, but you’ll have access to a wider range of expertise once you do.
We discussed control earlier and mentioned it is a double-edged sword. Keeping control of your IT estate by keeping all operations in-house may feel good, but control equals responsibility. Meeting your own customers’ SLAs, fixing problems with no obvious solutions, and resolving mission-critical IT failures are all on your internal team.
Reliability is as strong or as weak as the team you work with. This is true for internal teams and external partners alike. The only real concern with MSP reliability is choosing a partner that is in fact reliable.
With over two decades’ experience (and a catalogue of satisfied clients to match), Canon Business Services ANZ (CBS) has the expertise and track record that prove their reliability.
Yes. Quality MSPs remain up to date on the latest IT developments and are well equipped to transition your business to specific Cloud apps, or to assist in a broader Cloud transformation or migration. For the latter, though, you may want to consider a partner that goes beyond just IT, offering broader services such as IT consulting and IT professional services.
For more than two decades, CBS has been serving ANZ businesses in need of a managed service provider in Sydney or anywhere throughout ANZ. We also offer an array of additional service, including higher-level strategic IT consulting to network managed services or a broad suite of IT professional services.
Whatever your IT needs, no matter how simple or complex, CBS is here to solve your business IT challenges and help you move forward. Reach out to our team to learn more.