Small business owners, City Managers, Non-Profit Executive Directors, and other business leaders must lead businesses and organizations through some tough economic times during the next few years, as a recession is predicted after a reported 30-35% drop in US GDP for Q2 2020. This means adjustments to revenue goals, reductions in expenditures, and other difficult moves such as layoffs or furloughs.
History of Outsourcing During a Recession
Historically, mid-market and enterprise organizations have turned to Outsourced IT to control costs and risks during a recession. Outsourced IT for smaller businesses and organizations has only matured in the last 10 years (just after the “Great Recession” of 2008). But the same benefits that mid-market and enterprise organizations saw is available to small businesses and organizations.
Why Should Small Businesses & Organizations Outsource IT?
The average small business or organization should expect to have 1 IT person for every 40-60 employees. Let’s say your organization has 50 employees, so likely you would have 1 IT person. This means that 1 IT person is going to wear A LOT of hats.
- Desktop support / App support
- Network and infrastructure support
- IT security – risk management, cybersecurity best practices
- Budget planning and technical alignment
- IT Vendor management
- Platform support (backups, patching, antivirus management, etc.)
- Project delivery
Advantages of Outsourced IT
When you have in-house IT, that IT person is typically going to be good at one area (maybe managing servers or supporting applications), and weak in other areas (like cybersecurity).
- Get IT Strategy, Budgeting, and Planning, not just reactive IT support
- Scale your support needs up or down easily
- Fractional Resources dedicated to every aspect of managing your Technology
- Reduced business risk by having trained IT Specialists handling every aspect of IT Operations
- Reduced expenses for recruiting, hiring, and training IT staff in a hot job market (even in a recession)
Imagine that same 50 person organization recruits, hires, and onboards a new IT person. Let’s say that the recruiting fee is $10K, annual salary is $80K, add 20% for benefits, and another $5K in annual IT technical training. During the first 6-9 months of employment, he or she is a below average performer as they get up to speed on your IT environment and organization processes/workflows. They then spend another 6-12 months being an average performer before starting to look for their next job opportunity (IT people change jobs more frequently than just about any position). Imagine instead that the same 50 person organization chooses Outsourced IT. Onboarding costs are usually less than $10K. Monthly costs for full Outsourced IT are around $7500 per month. Budget about $1500 per month for projects, and you’ll have a good understanding of what your IT costs will look like.
Outsourced IT Has More Process and Standards
Outsourced IT firms typically have role-based employees (roles such as Fractional CIO, Platform Services, Service Desk, etc.). They also have standards and tools to help manage an IT environment more effectively.
- Fractional CIO – Quarterly Strategy Reviews to ensure IT standards are aligned to business/organization goals
- Fractional CIO – Technology Roadmap (visual, easy to digest for executives), IT budgets
- Platform Services – Backup monitoring, automated Windows patching, audited remote control tools, ticketing system with SLAs, Remote Monitoring of Servers/PCs/Network Infrastructure
- Online Documentation Portal
- Vendor Management – Track warranties/software subscriptions, vendor liaison
- Reactive Support – Unlimited remote and on-site support during business hours
- Proactive Services – 400+ question checklist of IT standards
- Small businesses & organizations can turn to Outsourced IT to control costs and risks during a recession
- Internal IT person has to wear A LOT of hats – “jack of all trades, master of none”
- Many advantages for Outsourced IT
- More process and standards for Outsourced IT