Weighing Outsourced IT Support Options: A Comprehensive Cost-Benefit Analysis

How much does it cost to completely outsource your IT services? The answer to this question depends on many factors, including how your business and selected provider operates. The majority of businesses that choose to outsource their IT needs do so in order to save money, but there are numerous other benefits as well.

For starters, having access to strategic technology expertise is a huge factor for fast-growing businesses. Add on better risk management, round-the-clock IT support, and industry compliance management (just to name a few) and it sweetens the deal even more.

This article takes a closer look at what exactly "outsourced IT" means, what it costs, the benefits of IT outsourcing, and some of the different business models you can choose from.

Table of Contents:

How Much Do IT Services Cost?

Outsourced vs. Co-Managed IT

Keeping Your IT Team In-House

Outsourcing Your Entire IT Department

What is Co-Managed IT?

What is the Average Cost of IT Support Services?

MSP that Works for Your Business

How Much Do IT Services Cost?

Generally, you can expect to pay an average IT support cost of $80-$150 per month per user. In some cases, an outsourced provider could offer device-based pricing (a calculation of the number of workstations and mobile devices they are supporting) but in most cases—and here at Ntiva—the per-user pricing structure is standard.

What is Outsourced IT?

Outsourced IT is the practice of outsourcing some or all of your business technology needs to a full-time third-party expert, commonly called a managed service provider (MSP), IT services provider, or IT consultant. Hiring outsourced IT support means a certified expert takes over control of virtually all tasks associated with supporting internal technological infrastructure.

The types of service packages you can get from a provider vary greatly—from an ad hoc hourly rate support team (sometimes called “break-fix”) that’s there when you need it, to monthly fee-based recurring service contracts that provide services that include a help desk, network monitoring and management, and Virtual CIO (vCIO)-level strategy.

There are tens of thousands of MSPs across the U.S. of varying sizes and service offerings, so it's important to choose the IT service provider who you feel can be a true partner to your organization and act in its best interest.

What's the Difference Between Outsourced IT vs Co-Managed IT?

There are 2 basic models of outsourced IT which need to be considered before looking at pricing. They are:

1. Fully Outsourced IT

Fully outsourced IT typically means that an organization has decided against having an IT team in-house and instead outsources all of its IT to a third-party provider, commonly referred to as the company’s MSP.

Services such as remote support and help desk, troubleshooting, security monitoring, backups, software updates, and more are provided by the MSP. Servers may also be stored and managed by the MSP at an off-site data center or host totally managed cloud services.

Other services can include IT budget planning, vCIO services, special projects, and more. Need help managing your third-party application vendors? Or figuring out how to qualify for cyber insurance? All of these should be handled by (or in collaboration with) your IT service provider.

The bottom line is that an MSP should be considered your strategic technology partner—one that keeps your entire network and technology stack up and running around the clock, with availability for strategic consultation as needed.

2. Co-Managed IT

Co-managed IT provides businesses with the ability to outsource IT tasks that the internal IT team does not have time for or does not have the skill set to tackle. In other words, the organization has an existing information technology staff but is looking for assistance or strategic guidance.

Services can include off-loading routine computing system work such as updates, backups, security monitoring, and even help desk support to free up internal resources. It can also consist of the opposite, where basic staff is in place to run the day-to-day, but the business now needs specialized talent (such as 24/7 cybersecurity monitoring) that may not be accessible in-house.

In addition to dramatic cost reduction and increasing efficiency, businesses can benefit from access to technology experts who are solving the same problems day after day with similar organizations, putting them in the best position to give guidance.

Larger operations may shift to a co-managed IT environment for several other reasons as well. For one, supplemental IT can help bolster an overworked internal IT department, allowing them to focus on core services. It can also provide specific services and skill sets that don't make sense to invest in, or access to specialty services such as the time and talent of a vCIO.

OPTION 1: Keep Your IT Team In-House

Internal IT departments may seem like the best option to keep your business running, with someone always available in the office to keep everyone’s printers running and passwords up to date. But this method often comes at a significant cost, depending on where your business is located and what your needs may be.

In the United States, the average salary of a desktop technician generally falls from $50,000-$60,000 per year. The primary role of this entry-level IT employee is to update and maintain hardware and software while handling small troubleshooting issues. The average IT manager makes just under $150,000 per year, depending on their seniority, taking responsibility for core business IT systems and ensuring that they are aligned with the overall business strategy. A seasoned IT manager will handle high-level tasks and ensure that the organization’s IT infrastructure is prepared for future growth and complies with industry standards, amongst many other tasks.

Of course, the most common problem is that many businesses can only afford one IT manager to handle all levels of IT operations for the entire company. If you’re tasking your IT managers or directors with desktop technician-level troubleshooting on a day-to-day basis, you’re not getting the greatest benefit from your IT investment. Plus, that manager is bound to be overqualified for such duties, leading to inevitable job dissatisfaction. Similarly, if you regularly task your lone junior technician with more responsibility they can handle, you're likely in for some other unpleasant surprises, especially when it comes to cybersecurity.

Here are a few of the pros and cons of keeping your IT team completely in-house:

• Pros:
  • IT staff is visible and easily accessed (at least during office hours)
  • IT staff is intimately familiar with the company culture, IT network layout, and existing applications
• Cons:
  • Higher-level technicians are unable to concentrate on business strategy as they’re bogged down by day-to-day troubleshooting
  • High overhead costs
  • Lack of expertise in specific areas
  • Operational interruptions due to designated time off

OPTION 2: Outsource Your Entire IT Department

When people see the words “outsourced IT,” “remote help desk,” or “cloud computing,” they sometimes get nervous. After all, isn’t it always best to have the IT guy stand behind you at your desk to fix that computer glitch?

The answer, for almost all basic IT issues, is a resounding no.

What IT services can be outsourced?

Many IT services can be outsourced to third-party teams, and the majority of them can be performed remotely. The brief list below outlines the benefits behind outsourcing a few of the most commonly offered services:

1. Help Desk Services

• Outsourcing help desk IT support frees up time for internal teams that may otherwise be spent on IT support tasks, such as troubleshooting software and hardware issues, responding to user inquiries, and resolving technical problems.
• An outsourced help desk team typically operates remotely, providing assistance through phone, email, chat, or ticketing systems. This arrangement allows organizations to leverage the expertise and scalability of the external service provider, freeing up internal resources and reducing costs associated with staffing and training an in-house IT support team.
• Outsourcing provides access to a larger talent pool and round-the-clock support, ensuring timely and efficient resolution of IT-related issues for end-users.

2. IT Strategy Planning

• Delegating the responsibility of developing and implementing an organization's IT strategies to MSPs means companies can leverage the specialized knowledge and experience of third-party professionals who are well-versed in IT trends, industry best practices, and emerging technologies.
• Organizations can gain access to a broader range of expertise, achieve more efficient and effective decision-making, and reduce costs associated with maintaining an in-house IT strategy team.
• By focusing on their core competencies while entrusting the strategic direction of their technology initiatives to dedicated specialists, companies can ultimately drive innovation and long-term growth.

3. Backup and Recovery

• Entrusting the critical task of safeguarding and restoring data through backup and recovery IT support to an MSP means access to specialized knowledge, advanced infrastructure, and round-the-clock support for backup and recovery processes.
• MSPs employ robust backup systems, redundancy measures, and disaster recovery protocols to ensure data protection against potential disasters, system failures, or security breaches.
• Outsourcing these responsibilities to an MSP allows companies to streamline their operations, reducing the burden on internal IT teams. With the expertise and dedication of a managed service provider, businesses can have peace of mind knowing that their data is securely backed up and readily recoverable, enabling them to focus on their core objectives and maintain uninterrupted business continuity.

4. Network Management

• MSPs can maintain and optimize your organization's network infrastructure with services such as network monitoring, configuration management, security updates, and troubleshooting, ensuring that the network operates efficiently and securely.
• Offloading the day-to-day tasks and challenges associated with network maintenance enables internal IT teams to focus on more strategic initiatives.
• MSPs can provide proactive monitoring and rapid response to network issues, minimizing downtime and improving overall network performance.

5. Employee Onboarding and Offboarding

• Outsourcing the integration of new employees to a third-party IT provider ensures a smooth and consistent onboarding experience for new hires by provisioning access to necessary systems, providing training materials, and setting up their workstations.
• Similarly, during offboarding, the external service provider can efficiently handle the termination process by revoking access rights and securely transferring or archiving data.
• Companies can enhance efficiency, reduce administrative burdens on internal teams, ensure compliance with security protocols, and deliver a positive employee experience from the first day on the job to the end of an employee's tenure.

More on the Benefits of IT Outsourcing

With the help of remote assistance software, most common problems such as a broken printer, slow computer, or forgotten password can be easily taken care of in minutes by your MSP. These types of issues don’t require anyone on-site, and can actually save time and money by having remote technicians take over immediately. You can pick up the phone at any time and be connected with a help desk support technician no matter where in the world you are.

Occasionally you will want or need on-site support. This can easily be arranged through your MSP, whether you need weekly support, an occasional visit for a special project, or help with an issue that simply can't be fixed remotely.

The number one reason businesses move to outsourced IT is the need for technical expertise, as technology continues to become more complex and change at a faster rate. It's almost impossible to get the breadth of expertise you need to stay competitive, and it’s not cost-effective to build and manage it yourself.

That's where managed IT services can really change the game, letting you take advantage of economies of scale that only an MSP can offer. Let’s weigh some of the pros and cons of fully outsourced IT support:

• Pros:
  • Access to a 24/7 extended team of experts, network monitoring, security, and support with no days off
  • Reduced risk due to higher IT staff volume
  • Faster resolution times than overworked in-house IT teams
  • Access to deep expertise such as managed cybersecurity, industry compliance, and vCIO services
  • Large cost savings, especially for small-to-mid-sized businesses
• Cons:
  • You need to choose an MSP that offers superior communication processes and customer service, as limited or patchy communication leads to frustration and ultimately overall dissatisfaction with the service
  • You must have at least one internal resource who is responsible for and dedicated to working with your chosen MSP

OPTION 3: Opt for Co-Managed IT

Having an internal IT manager and an outsourced IT service provider brings the best of both worlds to your business, and most larger organizations have begun to realize this. Co-managed IT can free up your IT team to let them refocus on your top priorities, such as creating strategies that empower your employees to be more productive and assuring systems are aligned with business goals.

IT leaders should be exploring ways that mobile apps, collaboration technologies, and cloud computing can be leveraged to drive greater productivity and profitability, but this is difficult to do when your team is bogged down with routine maintenance. Meanwhile, asking experienced professionals to do remedial tasks doesn’t contribute to job satisfaction. This also leads to overall office frustration, because your employees can’t work around broken technology while they wait for the office IT guy to come around!

The combination of having experienced IT managers to guide your organization into a stable IT environment for the future and also having dozens of help desk technicians available all day, every day leads to a productive and successful IT department for any size business. Here are some of the advantages and disadvantages of co-managed IT:

• Pros:
  • Leverage a combination of people who are well-versed in the organization and outside perspectives
  • Increase the productivity of your internal team
  • Outsource the tasks you don't want to do in-house while maintaining control and direction over your environment
  • Take advantage of expertise you may not have to help with strategic initiatives
• Cons:
  • Necessitates a careful selection process and in-depth vetting of MSP candidates
  • Can be too costly for smaller organizations to maintain in-house resources as well as pay for outsourced IT assistance

Breaking Down IT Service Costs

What Does the Average In-House IT Team Cost?

At a minimum, any organization with more than 20 or 30 employees will require one “Tier 1” help desk technician to handle day-to-day troubleshooting, plus one IT manager to handle larger administrative issues and business processes. If you were to average out salaries, having just those two roles would range from about $150,000 to $200,000 per year—and that may not include PTO, insurance, and other overhead costs for a team of two to fully operate and maintain a business IT infrastructure.

Of course, that amount goes up as you continue to grow your business. Two people simply won’t be able to keep up with an office of over 75 employees in the long term. Another Tier 1 help desk technician will be needed, and all overhead will go up. These averages also don’t include necessary continued training expenses for the IT employees, internal hardware replacement expenses, or emergency funds for any immediate IT needs.

How Much Does It Cost to Outsource IT Support?

There are many questions that people ask IT service providers, but questions surrounding IT managed services pricing models are at the top!

This number becomes a bit trickier to estimate because every serviced business has very different needs. In general, most organizations start with a basic service package of help desk, remote monitoring, updates, procurement, server management software, basic cybersecurity protection, and more.

Others may have more complex needs, including advanced cybersecurity requirements, cloud hosting, dedicated on-site support, and dozens of other technical requirements.

As a reference point, the average Ntiva client pays $85-$150 per user per month, depending on the service package chosen for the organization and the total number of employees. For an average 50-person organization with no on-site servers at an average cost of $100 per user, this would cost around $60,000 per year.

There may be additional one-time charges for emergency on-site visits or strategic business objective planning sessions, but the savings compared to an overstretched and burnout IT team of two are massive. Moving forward, the only additional cost of future growth in the company would be per-user, plus any new projects that need to be implemented as the years go by.

A Look at the Average Cost of Outsourced IT Support Services

The average cost of IT support services varies depending on a number of factors, including how large your organization is, the complexity of your IT systems, and what your business’s specific needs may be.

For clarity, we provide a brief chart illustrating a simple cost comparison between maintaining an in-house IT team versus outsourcing your IT to a third-party provider.

For the comparison table below, we use four examples:

• Organization A with 50 people: Basic Plan (Ntiva SSP Complete)
• Organization B with 75 people: Basic Plan (Ntiva SSP Complete)
• Organization C with 75 people: Advanced Plan (Ntiva SSP Compliance)
• Organization D with 125 people: Advanced Plan (Ntiva SSP Compliance)

Note that these are just rough estimates—there are many other considerations that will come into play when it comes to choosing the business model that is right for you.

How to Budget for Outsourced IT Service Provider Costs

Budgeting for IT costs with a reputable MSP shouldn't be difficult. Ntiva offers a per-user fee (we don't charge per device, as most users have multiple devices) so you know exactly what your bill will be every month.

However, there are some shady tricks to watch out for when dealing with an IT service provider, including (but not limited to):

• Hourly block fees: Some low-cost MSPs may attempt to simply charge a minimum number of hours per month to small businesses. You may believe you’re paying less by only purchasing 40 hours per month of service, but the provider will go out of their way to charge extravagant fees once you go over the pre-purchased hours.
• Flat fees: $1,000 per month for unlimited support sounds fantastic until you realize that your initial $1,000 fixed fee doesn’t cover on-site support, rushed response times, delivery fees, or hardware setup fees. Flat fee providers will likely nickel and dime you for all they can.
• Any fee structure that isn’t per-user/per-month: Generally speaking, all reputable IT service providers will charge your business in a per-user/per-month format. Paying one price per user gives you the peace of mind of knowing that anything the user needs is taken care of, including drive space, technical support, and security monitoring. This is the safest way to avoid overpaying and surprise fees.

With a per-user setup and detailed monthly breakdown of your account, you’ll know exactly what you’re paying for and be able to plan accordingly for future growth and expansion.

Finding an MSP that Works for Your Business

A respectable IT service provider will work with your organization’s vision and current IT infrastructure to give you a competitive advantage and provide the best possible service at the best possible per-user price.

If you’re a larger organization, the combination of an in-house IT manager with an MSP may be just the ticket to propel your business to greater heights at a reduced cost. If you’re interested in an IT partnership, or are worried about your current team struggling to keep up with your business needs, reach out to learn more about what outsourced IT can do for you.

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