Not all IT support is created equal.
For small to mid-sized businesses in particular, choosing the right level of support can be a head-scratcher.
Going the fully staffed, internal IT support team route usually leads to sticker shock. You’ll soon discover that trusting one person to handle everything either on-site or remotely can easily create chaos in your operations.
Because of this, most small to mid-sized businesses end up with a compromise solution for their IT. One that may not meet their needs and may get in the way of achieving their business goals.
In general, there are four types of IT solutions available to businesses with 200 or fewer employees. These are:
1. The Independent IT Contractor
Hiring an independent IT contractor who works part-time for a handful of businesses is usually the first option small to mid-sized businesses take.
This individual may have an assistant or two to help out, but at the end of the day, the buck always stops with them. The pro of going this route is lower IT costs, but placing all of your eggs in the basket of one individual can quickly turn into a problem as the business scales.
2. The Outsourced IT Shop
A step above individual IT support is a more advanced IT group, typically with 5 to 10 employees, that is able to deliver more sophisticated services. For example, they usually have some form of ticketing system to keep track of work and a centralized monitoring system to try to prevent downtime before it happens.
This IT shop needs to spread its focus across anywhere from 10 to 50 clients just to stay in business. Since the shop isn’t big enough to have fully differentiated departments (everyone is wearing more than one hat), your business may not be a top priority if it’s not one of their biggest clients.
3. Internal IT Employee(s)
As a business grows from small to mid-sized, they often bring on an internal employee who’s either full or nearly full-time and responsible for IT support and management.
There are benefits to taking this track, since they are readily available and focused on your business. But creating the role within the business also requires someone overseeing their work and budget requests. In addition, an individual employee – or even a small internal squad – will still need the help of multiple specialized vendors, bringing on additional costs to the company.
4. The IT Managed Services Provider
MSPs (as they’re commonly known) are the top of the IT food chain when it comes to small to mid-sized business IT support.
While many of the smaller outsourced providers can call themselves MSPs, the difference is in the approach. True MSPs bill the majority of their work on a fixed-monthly-fee basis and are staffed to be a single, comprehensive IT solution for their clients, meaning they have specialists in a wide range of IT support areas.
How to Choose the Right Level of IT Support
In IT support, as in most things, you get what you pay for.
The outsourced IT individual is usually the cheapest option, usually costing somewhere between $100 to $200 per hour, plus a base monthly fee to cover software subscriptions like anti-virus software and backups.
While both the outsourced individual and the small IT shop can be a great option for companies just starting out, keep in mind their revenue model (maximizing revenue) may not align with your business goals (minimizing costs to maximize profits).
This brings us to internal IT employees, which can be a great option for companies that need a lot of hands-on support. The challenge here is that an individual employee – or even a small internal team – is usually asked to perform multiple tasks with multiple skill sets, including help desk, IT management, project work, engineering, c-level planning, and so on. One person won’t be good at every area of IT.
Then there’s the overhead. Internal IT employees start around $60,000/year for a help-desk level employee and can exceed $120,000/year for an IT manager. That’s before you factor in software subscriptions for things that need to be licensed internally…or the cost of their employer-side taxes and benefits.
Most IT MSPs, comparatively, charge $200 to $250 per user per month as their core subscription fee. For a company with 50 employees receiving the highest level of support, that translates to roughly $120,000 to $150,000 per year in costs for the entire company.
That may seem high, but consider:
- The first IT employee tends to be an IT Manager making $90,000 to $120,000 per year. That cost jumps to between $110,000 and $160,000 after taxes and benefits are included
- Add in a junior help desk person ($60,000 + taxes and benefits) to help out the first internal employee and the cost quickly approaches $200,000 per year
- Now factor in all the necessary tools and outsourced services (since an individual or small team can’t do everything), which can run $20,000 a year or more
By partnering with an MSP, a business with around 50 users can depend upon a fully staffed IT department with specialists in every role. An MSP is also likely to do a better job since its goals align more closely with that of the business – the better the IT works, the happier the organization’s employees are and the more money the MSP makes.
MSPs can also be in multiple places at once, since there’s a whole team working together to solve IT problems.
Choose Your Support Wisely
IT is much more than just a budget item in the expense column. It’s the infrastructure that most companies run on and is often the catalyst for business growth, providing excellent service and achieving business goals.
Because of this, it’s critical to find the right IT partner, one that fits your budget while also delivering all the support you need. We might be a bit biased, but for small to mid-sized businesses, going with an MSP certainly makes sense.
Editor’s Note: This post was originally published in 2019 and has been revised and expanded upon.
