4 Ways Insourcing Negatively Impacts Your Bottom Line

When it comes to being a leader in a business, you need to be able to confidently make decisions that will help the company succeed in the long run. Of course, the best decisions are the ones that save you money, right? This increase in profit not only helps create resources for your team but it also gives you some wiggle room to make harder decisions in the future. So when you're looking at thousands (or perhaps a few more digits) of spend on things you see can be done in-house, the easy choice would be to cut that expensive service. Your job is the positively influence the company's bottom line - but what if the decision to bring your IT in-house (insourcing) takes a negative toll on your business?

IT usually falls under the "cut" category for a lot of reasons. Why outsource when you can bring that cost in-house? Can't we just hire a few guys? Build our own team to monitor the same issues an outsourced team is monitoring? All you need is a few young kids looking for a job and someone to lead them (which usually you have in-house). Between labor costs and the salaries of a few employees, it's an easy cut in cost for the same result. Not only will this lower costs but it also protects your team from a third party company coming in and taking over, pushing you to a point where your employees' jobs are at risk. Furthermore, bringing a team in-house builds culture and shows your dedication as leadership to the people you're leading. You believe in them. Win win. 

These are all good things. Of course they are. But ultimately, after those initial cuts, the expected effects on your bottom line will start to reveal hidden costs and problems you might not have thought about when deciding to insource your normally outsourced IT. Consider the following factors when insourcing your IT team. 

Problems with In-House IT

Wasted Money

This is always going to be your first thought. How can we save the company money? Insourcing might be the answer but there are hidden cost you might not be thinking about that waste money in the long run. Let's break it down. 

  • Building Your Team
    This includes things like recruiting new employees, providing them benefits like 401Ks and healthcare, as well as the salaries you now have to pay them. Even with a team of 3 (say 2 entry-level and a leadership position), you're looking at around $300,000 in labor, benefits, and salaries alone. 

    When you outsource, not only do you get 24x7 support from a dedicated support team of 150+ (6 dedicated), but their salaries and benefits are not your concern. Only the services and support they provide. 
  • Certifying Your Team
    But it can't stop there, right? In order to get the same quality of employee over time, you're going to need to think about certifications and specializations. This includes (all at separate costs) Microsoft certifications, Security Operations and Response specializations, as well as Cloud innovation and automation certifications like AI. This can be a major line item even, especially if you're certifying more than one person. PS you can't get cybersecurity insurance payouts without proof of these certifications in place. 
  • Keeping Your Team
    Especially with a smaller team of entry-level professionals, it's important to consider the type of employee you're hiring. Sure, they're inexperienced (also a risk), so you can pay them less, but these types of employees tend to churn and burn at a much higher rate. You become a stepping stool for their future growth. Studies show that the generation entering the work force (Gen Z and younger Millennials) stay in a company for roughly 2 years. In the age where young adults have never known a time without  technology and therefore have shorter attention spans, the reliability and brand loyalty seems to be going down. Unfortunately, the future work forces will only get worse. 


Ultimately, the problem with insourcing is that it's a concern with your long-term spend. Initially, you'll see increase in cash and production. But over time the effort and spend required will not provide the same value you're looking for. (click the image below to see an expanded breakdown)


Unreliable Security Measures

If you follow our blog, you've seen the impacts breaches have on small to medium-sized businesses. The average payout are skyrocketing and you're faced with a loss of data, employees, and ultimately, trust. As business leadership, you are a prime target for an attack - are you confident that an in-house team will protect you around the clock? Are you sure they'll know how to handle the insurance hassles if a breach does occur? 

Recently, we've seen a rise in a major cyber attack that affects C-levels specifically: Business Email Compromise (BEC). This isn't a wide-spread campaign to try and phish from your employees - this is a full scale focus on leadership and high ranking officials in specifically small to medium sized businesses. You are under attack and trusting your new in-house team to mitigate those risks is a big ask. One that will most likely fail in the event that you are targeted. 

BEC is the biggest risk that businesses face today and a single network administrator is not qualified to make Microsoft 365 decisions that either protect you or get your data back. For this reason alone, trust a reputable MSP to protect you. 

Wasted Time

As leadership, efficiency is key. And unfortunately, when deciding to move your IT in-house, frustrating wasted time will be a result.

  • Scalability and Solution Impacts
    With less people comes less scalability. It's a fact. Maybe you hire more than 3 (more money spent) and you have the dedicated 6 that we offer - the problem still remains. You're focused on other initiatives and this new team may begin to falter on updating patches,  addressing tickets, or helping keep the company protected. We offer guaranteed 24x7 support with an After-Hours team taking over the day shift. We offer your company the scalability it needs to make sure the business is protected and ready for the growth you're expected to produce as leadership. When your team can't meet those requirements, your bottom line suffers. Things aren't getting done. The business is not productive. 
  • Lack of Dedicated Documentation System
    Generally, this is something you can prevent but easily happens over time. You hire someone to lead your IT team and they have all the knowledge, strategy, and forethought for the company's IT. But, as we discussed above, you're dedicated IT guy may leave for a new position or, even on the chance that he's out sick or on vacation, if you don't have some sort of documentation system, you will run into road blocks. You'll have to wait for your IT leadership to return to fix any problems, address any tickets, or even direct their team in the event of a lack of communication. Are you willing to waste time because you don't have a 24x7 team? Are you willing to risk all your information resting on the shoulders (and only inside the head) of 1-2 IT guys?  

Wasted Resources

Unfortunately, as you continue to spend resources on new employees, you're taking a risk that those people won't produce what you want. Often time businesses hire a lot of inexperienced "professionals" to run their IT and will find that only 1 of them has experience in the product you're trying to deploy. Worse, the reality is a come in late, leave early mindset, and your workforce isn't producing nearly what you need them to (especially if it's a remote IT team!). Even worse than that, tools won't be fully utilized because you don't have the team to support it - or worse, smaller teams lack the monitoring tools required to stay on top of potential risk. Bandwidth is low and expertise is lower - a perfect storm for an attack. Either way, you're still expending resources to get what you've gotten easily and at a cheaper price from an MSP. 

Make the Best Choice For You

We're a business, too. We understand that in order to stay in business, you have to make money. Outsourcing is often an expensive line item on your quarterly and yearly spend reports, especially when you can't justify the cost. Your job in leadership is to assess the impact and make the hard decisions. 

We believe in the relationships we build with you. Our job is to make you feel confident in your IT team, to understand that we're not gunning for your teams' jobs, that we're not in this just to get your money - we're here to provide the best quality IT services that will protect your team in the long run. If we don't provide that, by all means, make the best decision for your company and either insource or find a new IT provider. 

But before you make the difficult decision to move from outsourcing your IT with a managed service provider (MSP), we want to make sure you understand the negative implications you'll be facing. If you're concerned, we'd love to have that conversation and put your mind at ease. 

Curious about other ways insourcing impacts your business? Contact us today and we'll answer all your questions face-to-face. 

Originally published on June 27, 2024

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About the Author

Emily Kirk Emily Kirk

Creative content writer and producer for Centre Technologies. I joined Centre after 5 years in Education where I fostered my great love for making learning easier for everyone. While my background may not be in IT, I am driven to engage with others and build lasting relationships on multiple fronts. My greatest passions are helping and showing others that with commitment and a little spark, you can understand foundational concepts and grasp complex ideas no matter their application (because I get to do it every day!). I am a lifelong learner with a genuine zeal to educate, inspire, and motivate all I engage with. I value transparency and community so lean in with me—it’s a good day to start learning something new! Learn more about Emily Kirk »

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