The Cost of Internal IT Support VS. IT Service Provider

As businesses increasingly rely on technology, the decision of whether to maintain an internal IT support team or partner with an external IT service provider has become crucial. Each approach has its advantages and costs, and understanding these can help businesses make an informed choice that aligns with their operational needs and financial goals.

Understanding Internal IT Support

Internal IT support involves hiring and maintaining a dedicated team of IT professionals who work within the company. These employees are responsible for managing all aspects of the company’s IT infrastructure, including hardware, software, networks, and cybersecurity.

According to PayScale.com, the national median income for an in-house IT tech is currently running at a little over $45,000 per year, with the upper end of that range reaching nearly $66,000 annually; and this does not include the cost of health benefits and other related overhead expenses. For more experienced technicians, the median pay rate is above $50,000 annually, with the upper range much closer to $71,000 yearly.

If we choose a salary of $47,000 for the purpose of this comparison, we must then add the cost of benefits, sick pay, vacation time and your annual payroll tax. These will total approximately $12,000 a year. Your IT tech will want to purchase an IT management system application, which all in could cost $2,500. Not to mention, the total for one-time expenses will range from $3,500 to $10,000, depending on the number of user desktops involved. Now your IT tech total cost of salary and benefits would be around $65,000 per year — and could be more.

Costs Associated with Internal IT Support

1. Salaries and Benefits: Hiring skilled IT professionals can be expensive. In addition to salaries, businesses must also cover benefits such as health insurance, retirement plans, and paid leave.
2. Training and Development: Technology is constantly evolving, requiring ongoing training and professional development to keep the team updated with the latest skills and knowledge.
3. Tools and Equipment: Maintaining an IT team requires investing in the necessary tools, software, and hardware. This includes computers, servers, networking equipment, and specialized IT management software.
4. Overhead Costs: Beyond direct employee costs, there are also overhead costs such as office space, utilities, and other administrative expenses.

Understanding IT Service Providers

An IT service provider, like Verity IT, is an external company that offers IT services to businesses. These services can include network management, cybersecurity, data backup, and more. IT service providers typically operate on a subscription or contract basis.

Costs Associated with IT Service Providers

1. Subscription Fees: IT service providers charge fees based on the services provided, often structured as monthly or annual subscriptions. These fees can vary depending on the level of service and the specific needs of the business.
2. Implementation Costs: There may be initial costs associated with integrating the service provider’s systems with the business’s existing infrastructure.
3. Scalability Costs: While IT service providers offer scalability, expanding services to accommodate business growth may incur additional costs.

For many small business owners, outsourcing their IT support may seem to expensive due to the hourly rate that some companies charge. However, this type of support can be extremely cost-effective because of the expertise being purchased and the experience the techs who visit are able to offer. Further, you should easily be able to budget for the monthly expense, based on the network and system evaluation and recommendations of the managed service provider you employ as your IT support team.

A responsible IT services company will always begin with an objective assessment of your current IT infrastructure, along with recommendations for the work they will perform to meet your needs. This can greatly reduce the cost of IT support for your small business and help close security gaps, rather than hiring an in-house tech and paying an annual salary, as discussed above.

The IT services provider techs usually possess a great deal more experience than an employee, as they deal with a variety of systems every day. In most cases, there will be little they have not seen, which will allow them to handle your specific needs more efficiently. Further, they will most likely assign a particular technician to your account, someone who will visit you regularly, allowing them to become intimately familiar with your IT setup and the needs of your business.

Best of all, your IT service will always be hands-on, with a live human being in place to answer your questions.

For the average small business, you should probably budget for something between $100 and $175 per employee, per month — a vast savings over hiring an in-house IT tech. The cost of managed IT support can vary greatly, depending upon the age and number of servers and desktops being used in your organization.