A COO chooses between staffing up or hiring externally.
We had a chat with a COO from a small business that’s been growing quickly. They feel they are at a point where they need to make a big decision about their tech support. From their perspective, they saw two options:
Hiring their own team: This means they would have to find the right people, train them, and provide them with all the tools they need.
Or:
Paying an outside company to take care of their tech stuff. As always, the budget isn’t huge, but their tech needs are getting trickier. They, of course, want to keep things easy and efficient. ”What do you all think is the best choice for a business like ours right now?”
”Have a seat, this is going to take a while….”
In today’s digital world, a strong IT approach is vital for all businesses. As Small and Medium-sized Enterprises (SMEs) grow, they face a choice: build their own IT team or hire an external service? This analysis looks at the costs, benefits, and challenges of each option. Our goal is to help business leaders like you make a decision that matches your goals and budget.
Here is a break down of the different parts:
1. Cost: Your Own IT Team:
- Starting Costs: Recruitment involves both money and time. Setup includes costs for infrastructure like servers, workstations, and software.
- Ongoing Costs: Factor in salaries, benefits, training, and maintenance.
- Unexpected Costs: Emergencies and tech projects can result in unforeseen expenses.
Outside Company (MSP):
- Starting Costs: Integration fees to align systems.
- Ongoing Costs: A service fee covering maintenance to 24/7 support.
- Unexpected Costs: Typically lower due to economies of scale.
2. Skills and Flexibility: Your Own IT Team:
- Expertise: Direct hiring control but limited to team’s skills.
- Flexibility: Changing team size or direction is time-consuming.
Outside Company (MSP):
- Expertise: Access to a wide range of IT skills.
- Flexibility: Services adjusted based on your needs.
3. Focus on Your Business: Your Own IT Team:
- Attention: Managing internal teams can divert focus.
- Integration: In-house teams integrate well with company culture and objectives.
Outside Company (MSP):
- Ease: Focus on core business; leave tech to experts.
- Objectivity: External perspective can highlight inefficiencies.
4. Handling Risks: Your Own IT Team:
- Security: The onus of security lies internally.
- Backup and Recovery: Robust backup and regular testing are critical.
Outside Company (MSP):
- Security: MSPs offer dedicated security teams.
- Backup and Recovery: Comprehensive services ensure data safety.
5. Long-Term Strategy: Your Own IT Team:
- Growth Alignment: IT evolves with business growth.
- Investment: A long-term commitment for stability.
Outside Company (MSP):
- Skalbarhet: Services adjust to business needs.
- Innovation: MSPs provide the latest tech solutions.
Conclusion: Every growing SME faces IT management challenges. In-house teams offer control and integration, but with challenges like recruitment and tech emergencies. MSPs offer flexibility, expertise, predictable costs, and scalability. They’re at the tech forefront, ensuring access to the latest solutions. Yet, they may lack the deep integration of an in-house team. For sectors like banking and finance, consider regulations like The Digital Operational Resilience Act (DORA) 2025.
Recommendation for Growing SMEs’ IT Strategy:
For SMEs seeking deep integration and control, an in-house IT team is advisable. This offers direct oversight and alignment with company values. However, if flexibility, a diverse skill set, and scalability are priorities, partnering with an MSP is a more fitting choice. Given the impending Digital Operational Resilience Act (DORA) 2025, SMEs in certain sectors might also find the expertise of an MSP beneficial for compliance. Ultimately, the decision should align with the SME’s goals, resources, and industry specifics. A hybrid approach, blending both options, could also be considered for a balanced solution.