What are the expected savings that can be realised, if you choose to outsource your IT support?

Businesses increasingly opt for outsourced IT support to manage their technology requirements. Managed Service Providers (MSPs), like Capella Computer Solutions, deliver a comprehensive range of services, including network management, cloud solutions, cybersecurity, data protection, and compliance with regulatory requirements. The shift towards outsourcing has been driven, in part by, the increasing complexity of technology, its pivotal role in business operations and the costs.

In this article, we delve into the reasons behind UK businesses choosing to outsource their IT needs. We explore how outsourcing facilitates cost reduction, provides access to expert support, enables flexibility as businesses expand, and frees up time for companies to focus on their core competencies.

So, let’s examine the potential savings in more detail:

1. Reduction in Staffing Costs

• In-House IT Teams:
  • Hiring and retaining full-time IT staff is expensive. Salaries for IT support technicians in the UK range from £25,000 to £40,000 annually, depending on their experience and location (ITJobsWatch).
  • Additional costs include recruitment, training, employee benefits, pensions, and taxes, which can add up to around 25-30% of an employee’s base salary.
  • A small-to-medium-sized business (SMB) might need at least 2-3 IT staff, so this adds up to £50,000-£120,000+ annually just for staffing.
• Outsourced IT Support:
  • Managed IT service providers, like Capella Computer Solutions, offer flexible pricing models, typically £50-£150 per user per month depending on the level of service. This often includes 24/7 support, regular system updates, backups, and cybersecurity monitoring.
  • For a 50-user company, this would cost between £30,000-£90,000 annually.
  • Savings of up to 50% or more compared to maintaining an in-house team.

2. Lower Overheads and Infrastructure Costs

• In-House IT Teams:
  • IT infrastructure maintenance costs, including hardware, software licenses, and energy, can be a major expense. Managing server farms, setting up networks, and maintaining security systems all come with high costs.
  • Businesses may need to invest in backup solutions, security tools, and dedicated office space for servers, costing £10,000 to £50,000 depending on the size of the infrastructure.
• Outsourced IT Support:
  • MSPs typically handle infrastructure in their own secure data centres and provide cloud-based solutions. This reduces the need for on-premise equipment, cutting costs for hardware, power, and physical security.
  • Savings of up to 30-40% on hardware and infrastructure.

3. Predictable Monthly Costs vs. Unpredictable Expenses

• In-House IT Teams:
  • In-house teams may face unexpected costs related to issues such as system failures, cybersecurity breaches, or unplanned downtime. The need for emergency support can lead to additional overtime costs or hiring temporary specialists, leading to unexpected IT expenses.
• Outsourced IT Support:
  • Managed services are typically billed monthly, offering businesses predictable IT expenses. Emergency support, regular system updates, and IT strategy advice are included, reducing the risk of sudden IT costs.
  • Savings from avoiding unplanned expenses can be substantial, potentially saving businesses up to 20-25%in total IT costs.

4. Enhanced Security and Compliance

• In-House IT Teams:
  • Maintaining security compliance (e.g., GDPR) requires continual investment in tools, regular audits, and specialist personnel. Small businesses often lack the budget for comprehensive security measures, putting them at risk of data breaches and costly fines.
• Outsourced IT Support:
  • MSPs provide enterprise-grade security solutions as part of their service, including firewalls, encryption, antivirus software, and intrusion detection systems. They also handle regular audits and compliance reporting, ensuring businesses stay within legal requirements.
  • Savings from avoiding fines or data breach costs can range from £10,000 to £500,000 depending on the breach severity and compliance requirements.

5. Access to Advanced Technologies Without High Capital Outlay

• In-House IT Teams:
  • Keeping up with the latest technologies (e.g., cloud infrastructure, AI tools, advanced cybersecurity) requires significant investment in both hardware and software, which can cost £20,000 to £100,000+.
• Outsourced IT Support:
  • MSPs offer access to cutting-edge technologies as part of their service package, meaning businesses don’t have to make large upfront investments. For example, cloud services can be scaled to business needs without capital expenditure.
  • Savings from avoiding large upfront capital expenditures can be 50-70% depending on the technology and scale.

6. Faster Issue Resolution and Reduced Downtime

• In-House IT Teams:
  • In-house IT teams may struggle to respond quickly to issues due to limited staff or knowledge, leading to downtime that can cost businesses anywhere from £5,000 to £30,000 per hour, depending on the industry and severity of the issue.
• Outsourced IT Support:
  • Managed services often guarantee SLA-backed response times with around-the-clock support, minimising downtime and improving productivity.
  • Savings from avoiding downtime can significantly improve operational efficiency, saving £10,000-£100,000 annually.

Conclusion

Outsourcing IT support can lead to savings of up to 50-70% compared to maintaining an in-house team, especially when considering staffing, infrastructure, and unpredictable IT costs. The level of savings depends on factors such as business size, the complexity of IT needs, and the chosen managed service provider, but the overall trend is a reduction in both capital expenditure and ongoing operational costs.