3 Reasons Why Startups Benefit From Outsourcing IT
Since 2004, Louisville Geek has provided IT support for numerous startup businesses. During that time, we’ve witnessed it all. Some ventures showed promise from the beginning and never looked back, while some failed due to bad luck or circumstances beyond their control, including labor challenges, a pandemic and inflation. Others maybe didn’t make it because the founders made critical errors that could have easily been averted.
Most startups eventually find that building a business requires more than just securing investment funds, creating a business plan, diving straight into operations and making a positive return without a hitch. In our experience, the most successful startups outsource tasks that are time-consuming and/or outside their area of expertise. Offloading such responsibilities helps firms better focus on fulfilling their mission, a critical advantage, especially for startups.
Whether it is a large enterprise or a small startup, businesses of all kinds outsource IT services for many different reasons.
1- Lower expenses
Most startups are strapped for cash. Even startups fortunate enough to be backed by venture capitalists and angel investors usually need to spend money wisely and prudently. By outsourcing IT services and support—notoriously complex functions boasting intense competition for qualified labor — startups can drastically reduce their operating costs.
Consider a startup with 10 employees. Like most startups, they rely heavily on technology to drive growth and improve operations. But lately the company’s experienced intermittent networking outages, so they consider hiring an internal IT administrator or outsourcing to a third party. A full-time IT staff member with the knowledge and experience required to manage the IT infrastructure for a business (no matter the size) would cost roughly $92,000 a year after factoring in salary, payroll taxes, insurance and certifications.
On the other hand, outsourcing to a managed service provider (MSP) like Louisville Geek would cost around $18,000 per year, or $1,500 a month. Our flat-fee rates can include unlimited support, Microsoft 365 licenses, cybersecurity, telephony and backup and disaster recovery, among other elements. And, because we employ 90 career-trained professionals, we always have team members ready and available. The in-house technology professional will require vacation and sick time and is but one person, making it difficult to cost-effectively scale to accommodate a project or short-term needs.
2- Focus on your core competencies and business objectives
Most startups strive for a leaner work model and are run by a small number of key employees who usually end up wearing several hats simultaneously. Often, this arrangement leads to unmanageable workloads, wasted time and, inevitably, mistakes.
When working with an outsourced IT provider, startups receive access to a wide range of technical skills, knowledge and expertise, allowing stakeholders to focus on what’s important. Rather than spending time troubleshooting network issues or resetting passwords, stakeholders can free time and resources for more pressing issues. And, as stated earlier, when offloading IT responsibilities startups need not coordinate operations, updates and workloads around the vacation schedule of a single in-house technician.
3- Improve cybersecurity
When security breaches make the news, it’s typically because a major company or software platform has been attacked, not a local startup. However, SMBs are at greater risk of being hacked compared to larger enterprises and major corporations because of smaller firms’ struggles to proper secure their systems and data. Recent statistics show that, in 2021, 71 percent of cyberattacks happen to businesses with fewer than 100 employees.
Most organizations will find it difficult to match the cybersecurity knowledge and expertise collected within a technical consultancy. Many IT services vendors manage internal dedicated security departments to better assure they maintain pace with cybersecurity developments, which change rapidly. The speed at which various IT security applications, systems, strategies and approaches evolve shows no signs of abating, and keeping current with the latest trends and techniques can be a full-time job in and of itself.
In addition to managed advanced threat detection systems that can employ artificial intelligence and machine learning to predict and automatically respond to cyberthreats, outsourced providers typically work with a variety of various solutions from many different vendors. From business continuity management platforms to cloud storage systems that specifically protect against the ever-increasing threat of ransomware and other malicious attacks, outsourcing technology services to an MSP can provide access to an expansive collection of effective security solutions a few in-house technology professionals would be challenged to achieve and maintain.
By outsourcing IT, your startup will dramatically increase its chances of success while reducing risks that threaten to overwhelm any company. Outsourcing enables focusing on key challenges and objectives while increasing flexibility and improving the speed of your development processes.