The True Cost of In-House IT Support

How do you truly evaluate the reasons it makes sense to keep certain technology services in-house vs. when it makes sense to work with an outside partner?

Mid-to-large sized U.S. Corporations would be wise to consider the true cost of IT support when making this determination. While it might seem more financially prudent to keep control in-house, often that is not the case.

Ask yourself these questions:

  • How many full-time technology staff members currently support your organizational needs?
  • Are there dedicated teams to support specific business applications?
  • How many staff are on each team?
  • Can those technology resources (FTE) evolve into revenue generators for the business?

Let’s be clear, your organization can’t run mission critical applications without these duties — it’s essential to your business operations. No one is suggesting that certain IT tasks are unnecessary, or that you’re overstaffed. It’s just a matter of considering if there is a better way to designate those resources. While some duties best remain in-house, others are best managed by providers that do them all day, every day, on a massive scale. Providers with a large set of skilled resources who have dedicated their entire careers to knowing every possible approach to those duties.

Consider if this makes sense for your company. There are both direct & indirect costs, that are challenging to calculate for any organization, so let’s take a commonsense approach.

Costs of Maintaining Required Systems:

Direct Costs Indirect Costs
Hardware Email
Facilities Local Networks (wired & wireless)
Power Line of Business Applications
Cooling ERP (Microsoft Dynamics GP, NAV, AX)

Is the act of keeping these areas running contributing to the advancement of the strategic interests of the business?

  • IT budgets are typically fixed, and most IT departments are considered business expense line items, or a necessary evil, and not revenue generation factories
  • Constant transformation exists in how businesses compete; the ones that embrace technology and launch new initiatives far outperform the ones that don’t
  • We live in a mobile world so businesses must engage & interact with their customers in ways that reach them anytime/anywhere. Customer experience — both positive and negative, spreads like wildfire
  • Quickly trying out new ideas and testing the market while minimizing costs are crucial to survival
  • You don’t have to get it right every time, but it’s important to get it right. If you are going to fail, fail fast. “I haven’t failed; I’ve just found 10,000 ways that won’t work.” – Thomas Edison
  • Business and IT must align – both parts of the organization need to be rowing in the same direction

How can you swing your IT resources towards these new initiatives while you “keep the systems going” and “develop and deploy” new offerings in this fast-paced world?

Here are a few tips on how to get started:

  • First, evaluate your organization with the questions previously presented, then explore further
  • Leverage the right partner(s); you may discover that you can outsource common administrative tasks that reduce your admin hours annually and those associated costs. This will free up those internal resources to support more strategic initiatives
  • Dust off the list of new projects those folks can work on that keep getting kicked down the road and start adding more
  • Evaluate the impact on your revenue of leveraging IT to launch new initiatives

When it comes to running your technology environment, you need to have the right people and tools to monitor, manage, and protect your business applications and data. With Rand Group’s Managed Services, you get access to a dedicated team of engineers, consultants, Microsoft SMEs and years of experience in the field managing and optimizing IT. We have a proven track record, from small projects focused on monitoring and reporting to larger engagements where we take on the most critical processes. Contact us for more information on how we can help your systems perform best.

– Software Delivered as Promised. No Surprises.

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Matt Woodward

Insight written by Matt Woodward

Vice President, Digital Transformation at Rand Group

Proactive and agile, Matthew Woodward is the Vice President of Cloud Sales at Rand Group, with over 20 years of experience helping small and mid-market businesses launch, transform, and scale their operations through cloud technology. His inspiring background combines over 14 years in leadership at Microsoft Corporation and 6 years in small business development and advisory as President of Piney River Ventures. A strategic leader and intuitive sales consultant, Matthew has a wealth of experience in cloud business model design and development for SaaS and IT Services, go-to-market strategy and execution, as well as financial forecasting on cloud subscription revenues.

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