Managed Services vs. In-house IT: Which One is Best for Your Organization?

Small and medium-sized businesses (SMBs) rely on technology now more than ever.

So, it stands to reason that deciding whether to outsource your IT management to a managed service provider (MSP) or hire an in-house IT staff is a big decision.

MSPs generally cost less and offer broad expertise that in-house IT staff can’t match.

However, in-house IT staff will give you greater control over your IT infrastructure and offer deep familiarity with your organization.

Ultimately, the right choice depends on your organization’s goals, budget and internal capabilities. For some, it’s a clear decision. For others, a hybrid approach can offer a practical balance.

Hungerford has spent years refining co-managed partnerships where our team complements internal IT staff without stepping on toes, and that collaboration often delivers the strongest results.

Here are some of the pros and cons of outsourcing your IT needs vs. hiring an in-house staff.

Managed Service Provider

Pros

Predictable costs: MSPs usually work on a subscription model, which makes it easier to predict monthly costs associated with running and managing your IT infrastructure. Additionally, because you don’t have to hire and train employees, there is a lower overhead cost and a lower risk due to “renting” rather than “owning.”

Broad expertise: MSPs support clients across industries like health care, legal, manufacturing and finance, building a perspective most internal teams don’t get. That experience, combined with access to specialists across key areas like cybersecurity and infrastructure, creates a depth and range that’s hard to match in house. MSPs also stay current on emerging tech and best practices so you don’t have to.

Scalability: As your business grows, your IT will grow with it. MSPs can easily increase your services without the need to hire more employees. Likewise, if you need to scale back, an MSP can help you pivot quickly, and you won’t need to let employees go.

After-hours support: While some MSPs offer 24/7 support, even the ones that don’t generally have a team member on call who will respond to after-hours emergencies within a certain time.

Focus on your business: Experts managing your IT allow you and your organization to focus on your core business activities. Many MSPs offer budgeting and lifecycle planning services, helping you plan for future expenses so you aren’t surprised by unexpected costs.

Cons

Less control: An MSP will often bring established processes, tool sets and standards to the table, which is part of the value. When your team doesn’t have a strong opinion or internal practice, that guidance can be a real advantage. But when you do have a preferred way of working, it can take effort and clear communication to align approaches. That tradeoff between standardization and customization is important to navigate in any outsourced relationship.

Vendor dependency: When you outsource IT, you’re relying on a third party to remain stable over time. If your MSP is undercapitalized, poorly structured or overly reliant on a few key people, even small disruptions can have outsized impacts on your business. It’s worth asking hard questions about financial stability, leadership continuity and operational maturity before signing a long-term agreement.

Not sole focus: An MSP manages the IT infrastructure for several clients, so unfortunately, your organization won’t be its sole focus. Emergencies are one thing, but an MSP might take longer to answer your ticket if it’s not an emergency.

Less familiarity: MSPs work with clients from many different industries, including health care, law, accounting, manufacturing and more. They aren’t experts in any one field, which can be a challenge when trying to get them aligned with your business goals.

In-house IT Staff

Pros

Full control: You hire the people who make up your IT staff and you have complete control over IT strategy, operations and decision-making processes.

Quicker response time: Since the IT team is directly on-site and easily accessible, you can expect tickets and even general questions to be answered faster. Your in-house staff also can work more closely with other departments, making for a more collaborative environment.

Deep familiarity: Your in-house staff will have a better understanding of your organization’s culture and values, as well as its processes, systems and specific needs. They’ll likely have a more vested interest in helping the company succeed and may have a higher level of loyalty than an MSP.

Tailored solutions: While some MSPs can implement IT solutions specifically designed for your company’s unique needs, you’re guaranteed that level of customization with an IT staff. Additionally, an IT staff will offer you more flexibility in handling those unique needs.

Cons

Higher costs: You’ll have to pay your IT staff with salaries, benefits and training. Also, those employees will have sick days or take vacation time, so you’ll need to figure out how you’ll pick up the slack when they are gone. There also will be costs associated with investing in IT infrastructure and tools that an MSP normally would cover.

Limited expertise: Even if you have an IT staff of three or four employees, they probably won’t have the skills or experience to match the employees of an MSP. An IT staff also will need ongoing training and development that is necessary to keep up with advancements in technology.

Growth challenges: It can be slow and costly to scale up IT resources since you own the infrastructure and tools. When your business grows, you’ll likely need to hire more IT employees to cover the expanding needs of your organization, which means additional salaries, benefits and training. Not to mention your current employees will want yearly raises.

Resource management: You only have so many employees on your IT staff, who need to handle day-to-day tasks, as well as bigger projects. There could be downtime costs with issues that cannot be fixed right away because of those limited resources.

What about Co-managed IT?

Don’t make the mistake of assuming you have to choose either MSP or an IT staff.

Co-managed IT — or hiring an MSP in addition to an in-house IT staff — is the best of both worlds and the ideal situation for many SMBs.

MSPs offer broad experience across many industries, while an IT staff will be deeply familiar with a single organization. Combining the two strategies offsets the weaknesses of each, improving the overall IT support for the organization.

The great thing about co-managed IT is your IT staff can be anywhere from a single person to a team of three or four. As long as an on-staff employee is handling IT tasks, it’ll offset the cons of completely relying on an MSP.

Co-Managed IT Services in Grand Rapids

Interested in outsourcing some of your in-house IT team’s services? Contact us here to see how we can help keep your business running smoothly while increasing security, productivity and profitability.

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