Making the Choice: Managed Service Provider or Internal IT Team

Make versus buy for small businesses can be a tough decision. Do you produce packaging materials in-house or buy them from a supplier? Do you handle legal in-house or hire an outside counsel? Do you do your taxes in-house or hire a CPA firm? Do you hire a managed service provider (MSP) or use your own internal IT team? These complex decisions each come with their own pros and cons and depend on your business needs. While we can’t tell you what to do with your packaging or your taxes, we would like to share nine considerations when evaluating whether an MSP or an internal IT team is right for you. 

Understanding the options

What is a Managed Service Provider (MSP)?

An MSP is a company that manages a customer’s IT infrastructure and/or end-user systems on a proactive basis using a monthly subscription model. MSPs typically offer a range of services, including network and infrastructure management, security, data backup and recovery, software updates, and technical support.  

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What is an internal IT team?  

An internal IT team is a group of employees within an organization responsible for managing and maintaining the company’s IT infrastructure. This team handles various tasks such as network management, cybersecurity, software development, hardware maintenance, user support, and troubleshooting.  

MSPs vs. internal IT departments:
9 key considerations

  1. Cost 

MSPs: MSPs are generally more cost-effective and scalable for small- to medium sized businesses. Costs are predictable, with a flat monthly fee covering all services. Without the need for salaries, benefits, or hiring or training costs, overhead costs are lower. However, for larger organizations with complex IT needs, MSPs may offer less control and potential long-term expense due to continuous payments. 

Internal IT Team: Internal IT teams require significant upfront and ongoing investment in personnel, infrastructure, and maintenance, but may provide more control for larger organizations with complex IT needs. Higher costs associated with internal IT teams include recruitment, salaries, equipment, and benefits, ongoing training and development expenses, as well as potentially higher long-term costs due to turnover and equipment.  

2. Technical Support 

MSPs: MSPs offer proactive, 24/7 support and monitoring of all applications and hardware, as well as robust disaster recovery planning. Services include remote monitoring, troubleshooting, and regular updates, ensuring minimal downtime and proactive maintenance. Service-level agreements (SLAs) ensure reliability. 

Internal IT Team: Internal IT teams provide day-to-day troubleshooting support via employees. However, due to budget and staffing constraints, internal teams may not offer 24/7 support without additional staffing, which is a limitation for businesses that require round-the-clock technology assistance and cybersecurity monitoring. 

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3. Skill & Expertise  

MSP: MSPs provide access to highly trained, certified technicians with a wide range of expertise and specialized skills. Teams receive continuous training and are up to date with the latest technologies, trends, and industry certifications. MSPs bring to bear experience across multiple industries and problems. 

Internal IT Team: Internal IT teams offer in-house knowledge of the company’s specific systems and processes. However, internal teams are potentially limited by the team’s breadth of knowledge due to the required continuous investment in training and certifications. 

4. Availability 

MSP: MSPs offer fully staffed help-desk services 24/7/365, ensuring constant availability and support. They manage coverage, meaning there is no downtime experienced by the client due to sickness, holidays, or vacations. This round-the-clock service guarantees that any issues can be addressed immediately, regardless of the time or day. 

Internal IT Team: Availability is typically limited to business hours. Response times depend on the size of the team and their current workload. Coverage may be affected by employee absences, which can result in potential delays in addressing IT issues. This limitation can be particularly challenging for businesses requiring immediate or after-hours support. 

5. Escalation 

MSP: MSPs offer structured escalation procedures with multiple tiers of support. This ensures that more complex issues are promptly escalated to higher-level experts with specialized knowledge. The process is streamlined, and clients benefit from a broad range of expertise without needing to manage escalation internally.  

Internal IT Team: The effectiveness of in-house escalation depends on the team’s size and expertise. Teams might lack specialized knowledge for complex problems, leading to potential delays in finding solutions and increased risk, vulnerability, and downtime. 

6. Technology & Tools 

MSPs: MSPs have access to the latest advanced technologies and tools, often at a lower cost due to economies of scale. They use industry-leading software for monitoring, security, backups, and more, ensuring that clients benefit from the latest innovations and best practices. MSPs also manage the procurement, maintenance, and upgrades of these tools, which can save clients time and money. However, the client may have limited influence over the specific tools and technologies used. 

Internal IT Team: Internal IT teams have the flexibility to select and customize technology and tools. However, acquiring and maintaining cutting-edge technology can be expensive and time-consuming. The company must also invest in training staff to effectively use and manage these tools, which can add to the overall costs and resource requirements. 

7. Control 

MSPs: While MSPs provide expert management and SLA-supported reliability, clients have less direct control over their IT operations.  

Internal IT Team: Internal IT teams have full control over IT decisions, policies, and daily operations. However, this level of control requires significant resources and training, including skilled personnel and robust management practices, which can increase complexity and costs. 

8. Scalability 

MSPs: MSPs offer scalable solutions that can easily adapt to changing needs. They typically provide flexible service plans that can be adjusted as the company expands or contracts, allowing for scalability without significant upfront investment. MSPs also have the resources and expertise to quickly onboard new users or locations, ensuring minimal disruption to operations.  

Internal IT Team: Scalability with an internal IT team can be more challenging, requiring significant upfront investment in personnel, infrastructure, and training. As the company grows, additional staff and resources may need to be hired and trained to support the increased workload. Conversely, during periods of contraction, downsizing can be difficult and may result in layoffs or redeployment of staff. The company also bears the responsibility of ensuring that the IT infrastructure can accommodate growth without sacrificing performance or security.

9. Security 

MSPs: MSPs prioritize security and often invest heavily in advanced technologies, tools, and expertise to protect their clients’ systems and data. Their teams of dedicated security professionals continuously monitor for threats, apply patches and updates, and implement industry best practices to safeguard against cyberattacks. MSPs also provide services such as firewall management, intrusion detection, and data encryption to enhance overall security posture. However, the level of security provided may vary depending on the specific services and SLAs agreed upon with the client. 

Internal IT Team: Internal IT teams have direct control over the security of the company’s systems and data, as well as an in-depth understanding of the company’s infrastructure and operations. However, security tools and training are limited to what is provided by the company. Resource constraints or skill gaps can impact the ability to effectively address emerging threats. 

Which is best for your business?

MSPs are an excellent choice for businesses seeking cost-effective, scalable, and expert IT support without the overhead of an internal team. On the other hand, internal IT teams may be better suited for larger organizations requiring in-house expertise with a deep understanding of their specific IT environment and processes. 

Do you need help determining whether an MSP or an internal IT department is the better fit for your needs? Contact TechMD for a free consultation to make an informed decision regarding the make vs. buy dilemma for your organization.


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