IN-HOUSE VS OUTSOURCING: PROS & CONS

Business owners often find it difficult to decide whether to keep IT services in-house vs outsourcing them to an established service provider. To ensure a business runs smoothly and maintains continual growth, few things are as important as having the right IT staffing and systems in place.

While most small businesses start off with an in-house IT department of one or two people, this is not always the right long-term solution. As the business expands, the requests made to the IT department will increase dramatically. If the in-house department struggles to keep up, the business runs the risk of being hampered by bottlenecks in workflows, slow response times, and prolonged periods of downtime.

For this reason, when businesses reach a certain size, most find that outsourcing IT is the best strategy to cope with the increased workload. However, it is important to remember that there is no one size fits all solution when it comes to IT services. As each business is dealing with a unique set of circumstances, what works well for one may be completely ineffective for another.

To help you decide which solution makes the most sense for your business – in-house vs outsourcing, in this post we’ll explore the main pros and cons of in-house IT and outsourcing.

 

 

1. IT In-House:

Benefits of IT In-House

• Knowledge of the business: The IT department will be familiar with how the business runs on a day-to-day basis. They will also have a good understanding of the ways employees and management are using their computers as well as the internal network itself. This information comes in handy when trying to quickly identify the source of an emerging problem.
• Being face-to-face – Physical conversations offer more engagement between employees (and employers) when covering the same project. This may lead to an increase in morale, a better understanding of the project and faster progress.
• Long-term relationship – Once a company decides to hire someone they think is a right fit, they’re investing in the employee’s talents, time, and future. If this is the case, they often want the employee to stick around for future projects and help the company in other ways. An increase in salary, room for growth and other on-office perks are great motivators for most people, especially for the long-term.
• Easier management process – For all the above reasons, the management process becomes much more simplified. Technical solutions usually become resolved much faster, and emergencies are easier to handle. When necessary, an in-house talent can also direct all their attention to a problem that must be fixed quickly.

 

Downsides of IT In-house

The cons of in-house development can mainly be seen in terms of its restrictions. You need to consider factors like the financial outlay, time, and quality control.

As mentioned above, hiring in-house also means looking for the right person fit for the job, investing in them, and making sure their onboarding process goes well. Finding the right people and training them can be a costly and time-consuming process.

Additionally, the training never stops, as they will need to constantly update their skills, knowledge, and more. All this, while making sure they’re a right fit within the team culture.

Of course, if they do satisfy all of the above criteria, they will need to be paid a regular competitive salary with certain employee benefits, in order to keep them satisfied within the company.

Once you do assemble a great in-house team with all the required talent, at the end of the day – you’re in full control. You have them fresh and ready for anything you might require along the course of the project.

Together, you will be working together towards a common goal, unified by the culture around your brand and have the precise knowledge of every little detail along the way.

If you have the budget and time, this might be the better option for you. If not, however, it’s also worth exploring other options.

 

 

2. IT Outsourcing:

Benefits of IT Outsourcing

• Going above and beyond: An outside vendor has a vested interest to outperform expectations as they are not an employee. All vendors have a strong desire to win their client’s business year after year. This means they will often go the extra mile to exceed client expectations.
• Free up internal resources: If IT is not central to a business’s product or service, it often makes sense to outsource it to free up resources for key internal functions. They can then maintain funds for other items directly related to their product or service.
• Comprehensive skill set: One of the advantages of software outsourcing development is expert skills. As most vendors employ hundreds of technical specialists, no matter what the IT problem happens to be, they should have the necessary expertise on hand to reach a solution.
• Constant support: There is no downtime as there would be if an in-house employee goes off on holiday. Furthermore, there is very little downtime on the nights or weekends as the majority of IT providers will have a comprehensive support system including full-time emergency contact.
• Rival larger competitors: Outsourcing IT can help smaller businesses to access technology resources to rival their larger competitors – resources they couldn’t otherwise access. This can create a more level playing field between large and smaller companies.

 

Downsides of IT Outsourcing

• Finding the right vendor: With so many different options available making a decision about which vendor to go with can feel overwhelming. Since IT affects almost everything a company does, time and effort must be invested to ensure a vendor is right for the business. Business owners should shop around to get a feel for which vendor best matches their needs and organizational culture. It is generally a bad idea to simply go with the cheapest vendor.
• Downtime: A good IT vendor should have a plan in place to respond to emergencies quickly. However, in some instances a larger client’s needs may take priority, pushing an “emergency” at a smaller business to the back of the queue.
• Lack of face to face interaction: The rep from the IT service provider will only be onsite on rare occasions. Businesses will have to handle the majority of the service issues remotely. Some business owners prefer not to work with exclusively remote support.
• Security and liability: Bringing in a third-party can make issues around information and security more of a liability. This is a somewhat bigger concern when using an offshore company, where laws around privacy and security may be different. As the arrival of the new GDPR regulation is just around the corner, businesses should ask lots of questions about how the vendor will protect sensitive data, including both employee and product-related information.

 

Final Thought

All in all, In-house vs Outsourcing – which one to choose depends on several factors. Entrusting the job of software outsourcing could turn out to be reasonable. However, in-house experts can be more lucrative in the long term. In the present scenario, most businesses are opting for both approaches. Small scale companies focus more on sales, marketing, and customer support; and at the same time, outsource the work like web/mobile application design and development, etc.

In coming to a decision, be sure to weigh up the advantages and disadvantages of each approach, as they relate to your specific business structure, culture, and requirements. No-one knows your business better than you do, and ultimately you want to ensure that IT staff (whether in-house vs outsourced) are going to have your best interests at heart.

With all the experience and a team of hundreds of skillful and dedicated IT engineers, CO-WELL Asia is a truthful partner of every company that needs IT services. Drop us a message now at sales@co-well.vn for quality service at a reasonable price.

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source https://co-well.vn/en/tech-blog/in-house-vs-outsourcing-pros-cons/