Can Outsourced IT Save You Money? (& How Much?)

Are you struggling with managing your IT department's rising costs? Do your in-house systems frequently break down, leading to costly repairs and unexpected downtime?

You're not alone. 

Businesses like yours often face these struggles and outsource IT to stretch their IT budget. 

At Intelligent Technical Solutions (ITS), we have years of experience helping companies streamline their IT management through outsourced services tailored to their specific needs. We invited Brian Kaminsky, ITS’ Phoenix Partner, to answer the following questions: 

• Can outsourcing IT reduce costs? 
• How much can you save by outsourcing IT? 

Whether you're a small business or a large corporation, getting a clear picture of possible savings will only benefit you in the long run.

Can Outsourced IT Save You Money? 

The simple answer is yes, absolutely. 

“On average, ITS clients see 20-35% in cost savings, depending on the service package,” Kaminsky said.

Determining whether the move to outsourcing will save you money is a different question that requires a long, hard look at your current IT costs and the type of outsourced IT your business needs.   

What are Your Current IT Costs? 

Managing IT internally seems straightforward, but the actual costs go far beyond just team salaries. In-house IT costs typically include: 

1. Miscellaneous Benefits 

IT specialists are highly skilled, which means they come with high benefit demands. Don’t forget to account for healthcare, retirement contributions, and other team benefits. 

2. Training Costs 

Your team requires regular training and certifications because technology constantly evolves.  

3. Equipment and Software 

On-premise hardware and licensed software also need regular upgrades to remain efficient. 

4. Downtime and Maintenance Costs 

When something breaks, how long does it take to fix? Every hour of downtime can cost thousands in lost productivity.

RELATED: IT Downtime Calculator [FREE ONLINE TOOL] 

While these costs add up, they’re often hidden in different budget lines, making it difficult to see the full picture. Many companies don’t realize how much in-house IT is truly costing them until they start looking at alternatives. 

What are Your Outsourced IT Options? 

You have four main options for outsourcing your IT, and the cost of each outsourced IT option will directly affect your ability to save money.   

1. Managed IT 

Managed IT is a service where you outsource your entire IT department to a managed IT service provider (MSP). You remove all the pressure of hiring, training, and managing an entire department. The MSP will oversee everything while involving you in decision-making. 

2. Co-managed IT 

Co-managed IT is a service where a third-party IT provider partners with your in-house IT to support your IT infrastructure. 

You are afforded the comfort of having staff on-site and can manage how many in-house technicians you need. There’s no pressure to hire more and more people. 

3. Direct Outsourcing 

Instead of getting an MSP or an agency, you can hire people as independent contractors or freelancers. Working with freelancers from around the globe can push down IT costs and removes the need to pay salaried benefits or provide training. 

4. Break-fix IT 

The break-fix IT model involves calling technicians when something breaks within your system and getting them to fix that problem for you - hence the name break-fix.  

The best part of this option is that you only call them when needed, so they’re generally more affordable than the other options. However, if you need them to fix something substantial, it increases costs, which can be unpredictable and difficult to budget for. The other challenge with break-fix is the reactive nature of the service, which makes this a firefighting endeavor rather than a proactive, preventive approach.