Savvy chief information officers know a little something about disruption. In an era of accelerating innovation, it’s up to CIOs to keep a cool head and assess what new technologies can improve their businesses, and which ones are better left on the shelf.
But while choosing and embracing the right disruptive technologies has always been part of the job, more recently CIOs are finding themselves grappling with an arguably more challenging consideration: Deciding how much of their IT operation should remain in-house, and how much should be outsourced.
It’s a different type of disruption—one focused on humans rather than hardware and software. And, in our experience, it’s the type of disruption some CIOs are less eager to embrace, despite its competitive advantages.
Understanding the Reluctance
Outsourcing is, of course, a pillar of the global economy and has been for decades, helping companies reduce costs and amp up efficiency. In the best cases, outsourcing improves quality, granting companies access to diverse skills that are lacking internally. In industries such as manufacturing, outsourcing is so common that it’s unusual when companies don’t do it. Though IT has a way to go before reaching manufacturing levels of outsourcing, it’s certainly trending in that direction: Gartner recently projected that IT services spending will jump nearly 9% in 2024.
Still, we’ve found some CIOs exhibit a particular resistance to outsourcing—one that hinges largely on trust and control. Understandably, they believe that people who work directly for them will prove more trustworthy in terms of safeguarding sensitive data, will perform higher-quality work, and will be more responsive to their directions and needs. There is also the fallacy that internal employees will embrace wearing multiple hats, therefore saving on operational costs. And sometimes CIOs are doubtful that outsourcing will reduce costs enough to make the whole endeavor worthwhile.
With apologies to IT outsourcing skeptics everywhere, it’s time to bust those myths.
Facing today’s IT reality
Here are five myths that are holding CIOs back when it comes to outsourcing.
Myth: I can hire the best IT talent myself.
Reality: Talented IT professionals often choose to work at managed service providers (MSPs) instead of in-house teams. Why? Because at the average company, IT professionals are considered support staff rather than revenue generators. Options for career advancement, professional development, and compensation growth can be limited. As a result, any projected cost savings from encouraging employees to take on multiple roles may not materialize—employees simply aren’t trained or motivated to do it.
At MSPs, IT pros are the heart of the organization, with greater opportunities for training and big prospects for advancement and earnings. The good news is that companies can still access top-notch IT talent, including certified experts, by partnering with the MSPs that hire them.
Myth: External providers won’t be as responsive to my needs.
Reality: The right external providers are more responsive to CIO needs. They have the scale for time and resource-intensive tasks like 24/7 network and systems monitoring that in-house teams often struggle to have time for. MSPs can also take over work that in-house teams find tedious, like managed backups with test restores. When a company is exploring adding new technology to its tech stack, it may often reveal a skills gap in its internal team—but the right service provider will often have a specialist on hand who can fill that gap and help a company effectively integrate new tech.
Of course, communication between a company and an external provider is a two-way street. CIOs should be sure to encourage their team’s adoption and use of formal communication tools and ticketing systems, as delineated in their service-level agreements, to facilitate faster response times.
Myth: Sensitive company data is best managed internally.
Reality: Data breaches happen all the time and in-house IT help desks are prime targets for hackers. The infamous MGM Casino hack reportedly occurred when a criminal impersonated a real MGM employee and tricked a help-desk employee into providing them access to company systems. Sophisticated IT providers and managed security services providers (MSSPs) are often better equipped to prevent such breaches. The best MSSPs have dedicated security teams and leverage advanced technology, including AI-powered tools and strong verification protocols, to stop security breaches before they start.
Myth: External providers won’t understand my business as well as in-house teams.
Reality: Quality providers specializing in specific industries can provide business insights rivaling those of in-house teams…and sometimes exceed them. At Xantrion, for instance, we’ve concentrated our work in the financial services, legal, and life sciences industries. This means that first and foremost, we are experienced in meeting industry-specific IT needs, including managing regulatory and compliance requirements. But it also means that thanks to the number of companies we serve in finance, the law, and life sciences, we can spot industry-specific issues or trends and help our clients address them. For example, we have figured out how to onboard 30 employees in one day for rapidly growing life science companies and work with industry-specific software vendors, such as Adapar or NetDocuments, to efficiently update software and troubleshoot issues.
Myth: The types of services I require will be too expensive.
Reality: A la carte models offered by providers like Xantrion allow companies to choose and pay for only the services that complement the work of their internal teams. If companies find their needs changing, they can adjust their a la carte options accordingly. In addition, companies may find significant cost savings by being able to access high-priced tools, such as Security Information and Event Management (SIEM) platforms, through their MSSP. For small to medium-sized businesses, SIEMs are often cost-prohibitive to buy and manage on their own
An increasing number of CIOs are waking up to the necessity of IT outsourcing, whether it’s because they see their peers doing it or because they’ve learned their hard lessons after being led astray by one of the myths above. Fortunately, there are MSP-managed service providers built for all markets, industries, and compliance-specific use cases. If you’re interested in learning more about how IT outsourcing can help your company, Xantrion is here to help. Contact us today to learn more.