Comparing Outsourced vs. Co-Managed IT

Choosing between outsourced and co-managed IT can affect how much control your business keeps, how quickly problems get solved, and how easily your team can grow. This guide explains the difference between the two IT service models so readers can find the option that fits their needs. 

Key Takeaways

• Co-managed IT adds outside experts to support your internal IT team instead of replacing it, which gives your business more flexibility while keeping control in-house.
• Fully outsourced IT puts all IT responsibilities in the hands of a third-party provider, which can help companies lower hiring pressure and stay focused on core business work.
• Co-managed IT often works best for companies that need extra expertise, easier scaling, or specialized help in areas like cybersecurity or compliance without building a larger full-time team.

Managing an in-house IT department has its challenges, such as significant investments in hiring, job perks, training, and other costs. But there are also important benefits, especially having complete control over work processes.

Is there a way to enjoy the advantages of internal teams without the elevated costs? Many organizations have achieved this goal by opting for an outsourced or co-managed IT model.

WHAT IS CO-MANAGED IT?

Co-managed IT is a hybrid approach that blends the strengths of internal teams with the flexibility of outsourcing. This model means adding experienced third-party personnel or IT services to your current program, not replacing your in-house IT department.

How does co-managed IT work? Here are a few key details:

• Managed service providers maintain a pool of talented, trained, and certified IT professionals ready to deploy.
• Your organization is in charge, determining how much or how little the MSP handles.
• Third-party specialists can assist on a short-term or full-time basis.
• External professionals can supplement your in-house teams, handle completely different tasks, or coordinate closely as a separate-but-synced unit.

Customization is a hallmark of co-managed IT. The idea is to find areas where a third-party firm can strengthen your operations, overcome obstacles, and deliver strategic solutions.

WHAT IS THE DIFFERENCE BETWEEN OUTSOURCED AND CO-MANAGED IT?

Defining IT outsourcing is tricky because there are countless models to choose from:

• Service-Oriented Outsourcing: Hiring third-party IT firms to perform network monitoring, penetration testing, recruitment process outsourcing, etc.
• Project-Specific Outsourcing: Contracting with an MSP for data center design, cloud migration, app development, GDPR compliance consulting, etc.
• Task-Specific Outsourcing: Using outside IT technicians for preventative maintenance, help desk, desktop support, etc.

What many businesses are really asking in this context is the difference between co-managed IT and fully outsourced IT services.

Complete IT outsourcing involves handing over all IT tasks to a third-party firm, from day-to-day upkeep to infrastructure improvements. MSPs have the talent and technology necessary to keep your network running smoothly, securely, and optimally.

WHY USE CO-MANAGED IT?

Every organization is unique, but there are three main reasons why companies select the co-managed model. It’s common for mid-sized businesses to experience more than one at the same time.

1. Expertise

In-house IT teams tend to be efficient, looking for ways to check off day-to-day tasks as quickly as possible. But highly complex issues may be beyond your team’s capabilities — or at the very least involve areas they don’t have much experience with. Co-managed IT provides on-call expertise in critical moments, helping your organization recover more quickly from problems or avoid them in the first place. 

2. Scalability

There is only so much a small team of developers can do, even empowered by AI. On the other hand, many MSPs can scale to the moon and back. It’s relatively easy for third-party IT firms to add to your headcount, take on specific project tasks, or even build out completely new features for your business.

3. Specialization

Either due to costs or hiring challenges, there are some areas of IT that many small businesses and mid-size organizations flat-out prefer to avoid. Cybersecurity is a major one, and regulatory compliance can be another.

A co-managed approach to IT means you have the experts you need in those positions, but you don’t have to front the cost of a full-time CISO or compliance specialist. Considering that CISOs in the U.S. make an average of $250,000 to $410,000 a year, alternative IT solutions are a smart choice.

WHEN SHOULD YOU OUTSOURCE IT SERVICES?

Fully managed IT is an excellent option for small businesses and mid-size companies that prefer to focus on core operations instead of technical details. You can save time, money, and resources.

Avoid hiring problems and high talent costs

A combination of high wages and living costs makes it difficult to attract qualified IT professionals in some cities. The cost of outsourcing tends to be lower, especially when you factor in employment expenses like workers’ comp. 

Make sure the job is done correctly

Managed IT services ensure professional results. Many MSPs have a decades-long reputation for high-quality work, accuracy, and dependability. The same isn’t always true for new IT hires.

A good example is outsourcing infrastructure management. Would you rather leave a million-dollar investment in the hands of recent grads or seasoned professionals who work with sensitive systems every day?

Streamline your operations

In-house IT works well, but only if you have the roles and resources for it. Outsourcing can strategically reduce management complexity and headcount. This often translates into improved returns.

Act quickly

It’s impossible to beat the speed of managed services for scaling. Third-party providers offer turnkey solutions. This is the “plug-and-play” option for IT.

WHAT ARE THE ADVANTAGES OF CO-MANAGED VS. FULLY OUTSOURCED IT?

Co-managed IT has its own advantages compared to full outsourcing. Here’s why this flexible option is so popular:

• Fine-Tuned Scaling: Co-managed IT lets you grow or shrink teams as project opportunities appear. Expansion is seamless.
• Greater Oversight: Keeping in-house control over project specifications can be important for regulatory compliance or sensitive data.
• Customization: The co-managed model adapts to your company’s unique circumstances, potentially providing more tailored solutions.
• Brand Fidelity: In-house workers know your company’s priorities, processes, and brand better than outside teams. Integrating third-party professionals into existing workflows preserves these advantages.
• Lower Costs: Co-managed IT programs rest comfortably between full management and break-fix outsourcing in terms of costs.

What co-managed IT involves is up to your company. Some SaaS companies outsource infrastructure maintenance, so in-house teams can focus on software dev. Other businesses exclusively use in-house workers for all cybersecurity and networking needs, but outsource the recruitment process.

IS CO-MANAGED IT OR OUTSOURCING THE BEST CHOICE?

Choosing the right IT model requires a careful analysis of your company’s circumstances, budget, and scope. Both co-managed and fully managed options deliver some benefits of managed services vs. outsourcing, including cost-effectiveness and cutting-edge tools.

Does your team have the expertise and resources to manage in-house IT completely? If not, third-party IT services pick up some or all of the slack.

At TSP, we’re experts in both service models. We provide customized IT outsourcing solutions for short-term projects and long-term needs. Choose IT services that fit your industry and operations like a glove.