Companies in the USA with internal IT teams face various challenges that can significantly impact their operations. One of the primary issues is talent acquisition and retention. Finding skilled IT professionals is increasingly difficult due to high demand across the tech industry. This situation is further complicated by skill gaps, particularly in specialized areas such as cloud computing, cybersecurity, and data analytics.

Cost management is another significant concern for these companies. The high salaries commanded by IT professionals, especially those with specialized skills, can strain budgets. Additionally, the need for continuous training to keep the team updated on the latest technologies adds to operational costs. Maintaining on-premise IT infrastructure, such as servers and networking equipment, also presents financial challenges, particularly when compared to the more flexible and often cost-effective cloud-based solutions.

Co-managed IT addresses the key challenges of cost management and talent acquisition by combining the strengths of internal teams with external expertise. Its main value is providing specialized skills without the need to hire full-time staff, thus reducing costs through flexible, pay-as-you-go services. This model enhances scalability and agility, allowing companies to adapt quickly to changing demands and improve security and compliance by leveraging the MSP’s advanced tools and knowledge.

Moreover, co-managed IT alleviates innovation fatigue by guiding the adoption of new technologies without overwhelming the internal team. It simplifies vendor management and ensures 24/7 support and maintenance, enabling internal teams to focus on strategic initiatives rather than routine tasks. This collaborative approach helps companies overcome resistance to change, accelerate innovation, and maintain a competitive edge in a rapidly evolving tech landscape.

Current IT Challenges Facing US Businesses

While cost management and talent acquisition are the primary concerns for US businesses with internal IT teams, companies face additional challenges that vary based on their scale and industry.

Scalability

Scalability and flexibility are ongoing challenges as well. As companies grow, scaling their IT infrastructure and teams to meet new demands can become increasingly complex and expensive. Moreover, internal teams may struggle to adapt quickly to new technologies or business requirements, especially if they are tied to legacy systems that are difficult to modernize.

Compliance

Security and compliance pose constant risks and challenges for internal IT teams. Protecting the company against data breaches, malware, and other cyber threats requires significant expertise and resources. Additionally, meeting industry-specific regulations, such as GDPR or HIPAA, can be complicated and requires specialized knowledge, which not all teams possess.

Innovation

Innovation and agility are often hindered by internal resistance to change. IT teams may be slow to adopt new technologies or methodologies, leading to a lag in innovation. The presence of outdated systems only exacerbates this issue, as they are often difficult to modernize and can limit the company’s ability to stay competitive.

Communication and Project Management

Communication and alignment between IT teams and other departments can be problematic, leading to inefficiencies and misunderstandings. IT teams may not always be fully aligned with the overall business strategy, resulting in wasted resources and efforts. Effective cross-departmental communication is essential, yet it is often lacking, causing delays in projects and other initiatives.

Project management is another area where internal IT teams often struggle. With multiple projects to manage simultaneously, teams can easily become overloaded, leading to burnout. Prioritizing projects effectively is also challenging, particularly when resources are limited, which can further hinder progress.

Vendor Relations and Licensing Fees

Vendor management adds another layer of complexity. Many companies depend heavily on external vendors for software and hardware, which can be challenging to manage, especially if the internal team lacks negotiation skills. Integrating third-party solutions with existing systems can create additional complications, including potential security vulnerabilities.

Support and Availability

Support and maintenance are ongoing concerns for internal IT teams, particularly the challenge of providing 24/7 availability. Ensuring minimal downtime for critical systems requires substantial resources and expertise, which not all teams have in abundance.

Innovations

Finally, innovation fatigue can set in as IT teams struggle to keep up with the fast pace of technological change. The sheer volume of new tools and platforms can lead to technology overload, making it difficult for teams to choose the right solutions and leading to inefficiencies in their operations. These challenges underscore the complexities of maintaining an internal IT team and may drive companies to explore alternative solutions such as outsourcing or adopting hybrid IT models.

Cost Savings Opportunities with Co-Managed IT Services

In a hypothetical scenario, we’re examining the internal IT costs of a mid-sized company in the USA with a workforce of 150-200 employees. The focus is on understanding the base costs associated with maintaining an internal IT team, which includes staffing, benefits, and training expenses. For this analysis, we’re considering the typical salaries for key IT roles: an IT Manager, a System Administrator, and a Help Desk Technician.

Typical Internal IT Costs for a Small IT Team in the USA

Although it depends a lot on the industry and specific business, typically a company of 150-200 people will have a team of at least 15 IT experts in-house.

• • IT Managers – 3-4 people – Annual Salary: $110,000 – $180,000/year source
  • System Administrator – 2-3 people – Annual Salary: $80,000 – $120,000/year source
  • IT Support – Help Desk Technician – 2-5 people – Annual Salary: $50,000 – $70,000/year source
  • Security and Compliance – 1-2 people – Annual Salary: $90,000 to $160,000

• IT Director/Head of IT – 1 person – Annual Salary: $150,000 to $210,000 per year

• Benefits (Healthcare, Retirement, etc.): Typically 30% on top of the salaries
• Training and Certification: $2,000 – $5,000/year (average costs calculated from here: https://www.ituonline.com/blogs/how-much-do-it-certifications-cost/)

For an internal team of 15 people, the costs for salaries, insurances, trainings and certifications usually exceed $1.2 million and go to $1.6 million.

Analyzing a Hypothetical Use Case for an Internal IT Team

For a mid-sized enterprise, the total annual cost for these roles alone can range from $1.2 million and go to $1.6 million. This figure does not include benefits like healthcare and retirement, which typically add 30% to the base salaries, as well as ongoing training and certification costs. It’s important to note that these are just the baseline costs for maintaining a small internal IT team. As the company grows or the complexity of its IT needs increases, these costs can escalate significantly.

Beyond staffing, there are additional costs related to security and compliance. For example, maintaining robust security measures requires investments in security software, which can cost between $7,000 and $20,000 annually. Compliance tools and audits, essential for meeting industry regulations, add another $15,000 to $35,000 per year. On top of that, proactive monitoring tools, necessary to ensure system uptime and security range from $7,000 to $15,000 annually, and maintenance contracts can add $15,000 to $40,000 per year. In total, these additional costs can range from $22,000 to $55,000 annually, further driving up the overall IT expenditure.

Cost Benefits with Co-managed IT

Co-managed IT solutions offer a more cost-effective alternative than supporting an in-house team. By partnering with a managed service provider, businesses can reduce high costs while gaining access to specialized expertise and tools that improve overall IT reliability and performance.

In the typical scenario, Co-managed IT includes a comprehensive range of services designed to fit your needs and specific targets. These services usually are bundled with 24/7 help desk support on demand, which addresses technical issues and troubleshoots problems remotely. Proactive network monitoring and management ensure that the company’s network operates smoothly, while cybersecurity services provide real-time threat detection and response, security audits, and compliance management. Additionally, co-managed IT can include backup and disaster recovery solutions, ensuring that data is regularly backed up and that there is a robust plan for business continuity. Cloud services are also part of the package, assisting with integration, migration, and ongoing management of cloud infrastructure.

Beyond the core services, co-managed IT can also include strategic consulting to develop long-term IT roadmaps and technology planning aligned with business goals. Overall, co-managed IT provides a flexible, scalable solution that combines internal and external resources to optimize IT operations and reduce costs.

Based on the CloudScale365 experience, leveraging our co-managed IT model can lead to a 40% to 60% decrease in overall IT costs if you compare it against supporting internal IT team. The savings result from reduced staffing, infrastructure, support, and technology upgrade costs while ensuring access to high-quality IT services and expertise.

Our customers can rely on hiring a skilful IT expert on an hourly basis to outsource complex IT tasks, which will cost significantly less than having an experienced internal expert. Get in touch to discuss!