Should you outsource your IT department?

Outsource IT well and you gain senior skills, predictable costs and time for your real work. Do it badly and you get rotating technicians, opaque bills and systems nobody owns. Here is how to decide.

Three models

Model	Works best when	The hidden challenge
In-house	150 or more staff, complex systems, technology as an advantage, on-site needs, and pay that keeps senior talent	One NYC generalist costs $85,000 to $120,000 in salary, or $130,000 to $180,000 with overheads, and cannot master every area
Outsourced	10 to 100 staff, IT that supports the business, predictable costs and breadth without hiring	Less in-house knowledge and presence, and MSP quality varies widely
Co-managed	75 to 300 staff, a capable IT lead who needs specialist backup, and compliance needing inside and outside skills	Unclear roles breed blame and duplicated work

Co-managed IT keeps a senior IT manager or small team in house. A provider adds security monitoring, help desk overflow or strategy.

Five factors to weigh

1. Size

• Under 50 employees. Outsourcing almost always makes sense. You cannot justify a full IT team, and one IT person is a single point of failure.
• 50 to 150 employees. This is the decision zone, so weigh the other four factors. Full outsourcing and co-managed IT both work here.
• Over 150 employees. Consider co-managed or in-house IT with outside strategy. You likely need staff, plus outside help for projects and security monitoring.

2. Complexity

Cloud tools, standard devices and no regulation are easy to outsource. On-site servers, custom apps, HIPAA, SOC 2 or PCI, and special hardware often need some in-house expertise. A standard Microsoft 365 or Google Workspace setup is simpler than most people think.

3. Total cost

Count everything on both sides.

In house	Outsourced
Salaries and benefits	The monthly fee
Recruiting, often 3 to 6 months per NYC IT role	Project fees for big initiatives
Training and certifications	Hardware and licence markups
Management time	Out-of-scope work
Gaps for holidays, sickness and turnover
Monitoring, ticketing and security tools
Night and weekend cover

For a 50-person company, we typically see $180,000 to $250,000 a year in house. That buys one generalist with tools and overheads. A capable outsourced provider with broader cover typically costs $120,000 to $180,000.

4. Risk

An IT person who quits takes knowledge with them. An MSP with documented processes and a team gives continuity. An MSP that neglects your account can leave you waiting in an outage, so weigh both risks.

5. How central technology is

If technology is your advantage, as in a software or data-driven firm, keep technology leadership in house. If it is necessary but not a differentiator, outsourcing frees money for what drives revenue.

Red flags in MSP contracts

• Vague scope. “We manage your IT” means nothing. Get a scope document that lists what is included and what costs extra.
• Long lock-ins. A three-year contract with no early exit is a warning. Good providers keep clients with service.
• Hidden markups. Some MSPs profit on resold hardware and software. Ask for the markups, or buy direct.
• No SLA penalties. Without response and resolution targets with consequences, nobody is accountable.
• Your data held back. Network documents, passwords and settings must belong to you.
• No named lead. Without an account manager or vCIO, you are buying break-fix support.

The transition

Phase	Time	What happens
Documentation	2 to 4 weeks	Record diagrams, assets, vendors, licences, passwords and known issues.
Parallel running	4 to 8 weeks	The new provider learns while the old support stays as a safety net.
Cutover	2 to 4 weeks	The new provider takes over, and issues rise as it meets surprises.
Review	From day 90	Check SLAs, responsiveness and advice, since the first quarter sets the tone.

If your current IT person or provider will not help document, that tells you something.

How SBK works

Some clients outsource all their IT to SBK, and others keep their staff and use us for strategy. We have moved firms from overloaded in-house teams to managed IT, as in our managed IT case study. We earn no commissions, so we do not push outsourcing where it does not fit.

Questions people ask

What does outsourced IT cost?

For 25 to 75 employees in the NYC area, expect $125 to $200 per user a month. That usually covers help desk, monitoring, patching, basic security and vendor coordination. Migrations, office setups and compliance work are quoted separately.

Can we outsource only part of IT?

Yes. Co-managed IT is increasingly common. An internal IT manager runs daily work, and a provider takes security monitoring, help desk overflow or cloud management.

What happens to our IT staff?

In co-managed IT, they work beside the provider. In full outsourcing, some MSPs offer to hire them, which keeps their knowledge. Tell your team early.

How long does the move take?

Usually 8 to 16 weeks from signing to full running. Rushing it is one of the most common mistakes.

What is the biggest risk?

The wrong provider on a long contract. Start with 12 months, set clear SLAs, and own every document and credential from day one.