by The Computing Australia Group | IT Outsourcing:
Pros and Cons
Modern businesses run on technology: networks, devices, cloud apps, data, cybersecurity, compliance—the list grows every quarter. The big question is no longer if you should seek external help, but how much of your IT you should outsource, to whom, and under what model. There isn’t a single “best” answer; the right mix depends on your size, sector, risk profile, internal capabilities, and growth plans.
This guide rewrites and expands your original post into a comprehensive, plain-English resource for decision-makers. You’ll learn what services are typically outsourced, the detailed pros and cons, how to choose between in-house, co-managed, and fully managed models, and the KPIs, SLAs, pricing models, and governance practices that keep outsourcing on track. We’ll finish with a practical decision framework, an implementation checklist, and an SEO kit for publishing.
What Is IT Outsourcing?
IT outsourcing is the practice of engaging a third party-often a Managed Service Provider (MSP) or specialised partner-to deliver some or all of your IT functions. These can range from day-to-day help desk and patching through to cloud migrations, security programs, and business continuity.
Outsourcing can be:
- Project-based (time-boxed, outcome-driven-e.g., Office 365 migration).
- Managed services (ongoing, SLA-backed operations-e.g., 24×7 monitoring).
- Co-managed IT (the MSP operates with your internal team, dividing responsibilities).
- Fully managed (the MSP acts as your entire IT department).
What Is IT Outsourcing?
Depending on your internal headcount and workload, you might outsource one area or many. Typical candidates include:
- IT Service Desk / Help Desk (tier 1–3 incident handling, request fulfilment)
- Email and Collaboration Security (phishing protection, spam filtering, DLP)
- Network Operations Centre (NOC) (monitoring, alert response, performance tuning)
- Security Operations Centre (SOC) (threat detection, response, MDR/XDR)
- Ransomware Response & Recovery (incident handling, forensics, restoration)
- Cybersecurity Program (policies, controls, Essential Eight uplift, audits)
- Cloud Services (Azure/AWS/GCP architecture, FinOps, governance)
- Data Backup & Disaster Recovery (BaaS/DRaaS, testing, runbooks)
- IT Strategy, Audits & Consulting (roadmaps, risk assessments, cost modelling)
- IT Projects (rollouts, upgrades, M&A integration, relocations)
The Advantages of Outsourcing IT
Outsourcing done well doesn’t just “keep the lights on.” It can accelerate projects, reduce risk, and turn IT into a predictable, scalable service.
1) Focus on Core Business
Offloading routine operational tasks frees leaders and internal specialists to focus on growth, customer experience, and innovation. Product managers and line-of-business teams reclaim time otherwise lost to fire-fighting.
Typical outcomes
- Fewer context switches for internal staff
- Faster delivery of revenue-generating initiatives
- Clear separation between “run” and “change” workstreams
2) Instant Access to Specialised Skills
Even strong in-house teams can’t be experts in everything (nor keep up with every new cloud or security nuance). MSPs work across many clients and industries, bringing:
- Broad exposure to edge cases and emerging threats
- Cross-vendor certifications and up-to-date playbooks
- Surge capacity for major projects without permanent hires
3) Lower and More Predictable Operating Costs
- Training & Certification: The provider bears much of the upskilling cost.
- Licensing & Tooling at Scale: MSPs often bundle enterprise-grade RMM, EDR/XDR, SIEM, backup, and automation tools at lower per-unit costs.
- Right-sized Support: Pay for the coverage you need (business hours vs 24×7), and scale up or down with headcount.
4) Reduced Organisational Complexity
Outsourcing lets you keep only the roles essential to your core mission. You can:
- Flatten internal hierarchies tied to commodity run-ops
- Avoid building non-core capabilities (e.g., 24×7 on-call rotations)
- Integrate an MSP project manager with your PMO for unified delivery
5) Faster Access to Advanced Technologies
Some platforms are used too rarely to justify licenses and training in-house. Outsourcing brings:
- Enterprise-class tooling (monitoring, response automation)
- Reference architectures proven across multiple environments
- Accelerators, templates, and IaC that compress project timelines
6) Improved Resilience and Security
Reputable MSPs operate with standardised controls, change management, tested backups, and documented runbooks. They are accustomed to audits, compliance frameworks, and recovery rehearsals, which often surpass ad-hoc internal practices.
The Disadvantages and Risks of IT Outsourcing
1) Security and Privacy Exposure
Sharing systems and data with third parties increases your attack surface.
Mitigations
- Contractual data handling and breach notification clauses
- Background checks, least-privilege access, MFA, PAM, and audit trails
- Clear separation of production vs test data; encryption at rest and in transit
- Map responsibilities in a RACI for security controls (who owns what)
2) Unmet Quality Expectations
Quality dips when expectations aren’t explicit.
Mitigations
- Define service scope to the task level. Spell out inclusions/exclusions.
- Use SLAs and SLOs (response, resolution, first-contact times).
- Create KPIs (customer satisfaction, first-contact resolution, MTTR).
- Include service credits and continuous improvement clauses.
3) Scope Creep and Surprise Costs
Vague requirements lead to change requests and budget shock.
Mitigations
- For projects: a Statement of Work (SOW) with acceptance criteria and milestone sign-offs
- For managed services: a Service Catalogue with unit pricing for out-of-scope work
- Consider retainers or tiered bundles to stabilise costs over time
4) Impact on Culture and Morale
Internal teams may fear replacement. Mistrust undermines collaboration.
Mitigations
- Communicate the “why” and clarify career paths for in-house staff
- Opt for a co-managed model that preserves strategic in-house roles
- Set joint goals and shared channels (stand-ups, Slack/Teams, retros)
5) Vendor Lock-in and Knowledge Loss
If all knowledge sits with the provider, switching gets painful.
Mitigations
- Insist on documentation ownership and runbook handover
- Maintain admin of record on key platforms; use your tenant where possible
- Include exit assistance clauses (data export, script transfer, knowledge transfer)
Choosing Your Operating Model
Use the matrix below to decide where you sit today-and where you want to be in 12–24 months.
| Factor | In-House | Co-Managed IT | Fully Managed |
|---|---|---|---|
| Team size | 10–1000 IT staff | 2–10 IT staff | 0–2 IT staff |
| Pace of change | Moderate | High | High |
| Budget predictability | Lower | Medium | High |
| Control & customisation | Highest | High | Medium |
| 24×7 coverage need | Low | Medium–High | High |
| Skills breadth required | Narrow–Medium | Medium–Broad | Broad |
| Best for | Large enterprises, regulated orgs with deep IT | Mid-market firms with lean teams | Small–mid orgs seeking turnkey IT |
What to Demand in an IT Outsourcing Agreement
A strong contract and governance cadence are your best friends.
Core Components
1) Statement of Work (SOW) / Service Catalogue
- Inclusions, exclusions, hand-offs
- Operating hours, holidays, escalation path
2) SLAs/SLOs and KPIs
- Response/resolution times by priority
- Uptime targets and maintenance windows
- CSAT targets, first-contact resolution, backlog limits
3) Security & Compliance
- Access controls, MFA, PAM
- Data sovereignty and retention
- Incident response timelines and responsibilities
- Alignment to frameworks (e.g., Essential Eight maturity, ISO 27001)
4) Change & Release Management
- CAB participation, blackout windows, emergency change protocol
5) Reporting & Reviews
- Monthly service review with a standard pack (tickets, trends, risks)
- Quarterly business review (roadmap, cost optimisation, lessons learned)
6) Commercials
- Pricing model (see below), service credits, indexation rules
- Clear out-of-scope rates (after-hours, projects, travel)
7) Exit & Transition
- Knowledge transfer, documentation, credential handover
- Data export formats and timelines
Pricing Models Explained
- Per-User / Per-Device: Simple and scalable for BAU support.
- Tiered Bundles: “Essentials / Standard / Advanced” with increasing controls (e.g., EDR → XDR → MDR + SOC).
- Fixed-Fee Projects: Defined scope with milestones.
- Time & Materials (T&M): Flexible for ambiguous work; requires governance to avoid cost drift.
- Retainers: A set number of hours or outcomes per month; good for ongoing enhancements.
Measuring Success: KPIs You Should Track
- Service Desk: First-contact resolution (FCR), average speed to answer (ASA), SLA attainment, CSAT/NPS
- Operations: Patch compliance %, backup success %, MTTR/MTBF, change success rate
- Security: Mean time to detect/respond (MTTD/MTTR), phishing failure rate, vulnerability remediation time, Essential Eight maturity
- Financial: Cost per user/device, cloud spend variance, project on-time/on-budget %
Decision Framework: Should You Outsource (and How Much)?
Answer the questions below and tally the outcomes.
1) Do you need 24×7 coverage?
- Yes → lean toward MSP or co-managed.
- No → in-house or hybrid may suffice.
2) Are security and compliance obligations increasing?
- Yes → engage specialist capability; consider SOC/MDR.
- No → basic managed services may be enough.
3) Is your internal team overloaded or attrition-prone?
- Yes → outsource Service Desk/NOC first to protect your architects.
- No → keep core ops and outsource projects.
4) Do you have broad, rapidly changing tech needs?
- Yes → MSP for access to multi-disciplinary skills.
- No → selective project outsourcing.
5) Do you need predictable costs?
- Yes → managed services with fixed-fee bundles.
- No → T&M/project-based is fine.
6) Is preserving domain knowledge in-house crucial?
- Yes → co-managed with strong documentation clauses.
- No → fully managed is viable.
Rule of thumb:
- Start with Monitoring + Patching + Backup + Service Desk as a managed baseline.
- Layer in Security (EDR/XDR, SOC) based on risk.
- Keep architecture, vendor management, and business analysis internal if possible.
Implementation Checklist
Before RFP
- Define business objectives (cost, risk reduction, speed, coverage).
- Inventory assets, licences, apps, integrations.
- Map responsibilities with a RACI (Internal vs MSP).
During Vendor Selection
- Evaluate certifications, references, toolset, and security posture.
- Validate financial stability and local presence/coverage windows.
- Run a pilot or paid discovery to de-risk assumptions.
Contracting
- Lock in scope, SLAs, KPIs, reporting pack, and change control.
- Include documentation ownership and exit assistance clauses.
Onboarding
- Credential management (MFA/PAM), network access, and monitoring agents.
- Knowledge transfer: topology, runbooks, known issues, maintenance windows.
- Communication channels (shared Teams/Slack, escalation matrix).
First 90 Days
- Baseline reporting (tickets, vulnerabilities, patch compliance).
- Quick wins (fix backup gaps, standardise images, eliminate critical alerts).
- Agree quarterly roadmap and improvement plan.
Example: When Outsourcing Makes Immediate Sense
- You’re expanding to new sites or adding remote teams and need standardised builds and zero-touch device provisioning.
- You’ve had a near-miss with ransomware and lack EDR, SOC monitoring, or tested recovery.
- Cloud costs are spiking and you need FinOps expertise to right-size workloads.
- Your head of IT is the only person who knows the environment-an MSP spreads the knowledge and reduces key-person risk.
What a Quality MSP Brings to the Table
A mature provider typically offers:
- Prevention-first mindset with automation and permanent fixes (not band-aids)
- 24×7 monitoring via integrated RMM, SIEM/XDR, and alert triage
- Investment in documentation (diagrams, runbooks, password vaults, asset CMDB)
- Continuous patching and configuration baselines
- Quality assurance and change control procedures
- Dedicated escalation teams beyond the help desk
- Strong vendor relationships to accelerate third-party resolutions
- Named account managers and quarterly business reviews
These capabilities translate to fewer incidents, faster restoration, and clearer alignment between IT and business value.
Summary: Pros & Cons at a Glance
Pros
- Focus on core priorities
- Access to specialist skills and tooling
- Predictable costs and easier scaling
- Reduced operational complexity
- Stronger resilience and security posture
Cons (and how to counter)
- Security exposure → tighten contracts, access, and monitoring
- Quality gaps → SLAs, SLOs, KPIs (+ service credits)
- Cost surprises → precise scope, catalogued extras, retainers
- Culture impact → transparent communication, co-managed model
- Lock-in risk → documentation ownership, exit clauses, tenant control
Computing Australia can help your business flourish and reach maximum potential. Contact us or email us at sales@computingaustralia.group to schedule a no-obligation chat with a consultant.
Jargon Buster
DCloudsuite software – Is a proprietary Computing Australia solution that provides round the clock monitoring of critical infrastructure and systems.
Network Operation Centre – NOC is a centralised location or team that monitors the client’s IT systems and infrastructure round the clock.
FAQ
Is outsourcing “all or nothing”?
No. Most mid-market organisations adopt co-managed IT: the MSP handles run-ops and specialist security; your team focuses on architecture, business partnering, and vendor management.
Will an MSP replace my IT team?
Only if you choose that model. Many MSPs are hired to protect scarce internal talent from burnout by taking the 24×7 and ticketing load.
How do I avoid lock-in?
Retain licence ownership where possible, require regular documentation handovers, and negotiate exit clauses covering data export and knowledge transfer.
Isn’t outsourcing less secure?
It depends on the provider and controls. A disciplined MSP with strict access management, SIEM/XDR, and audited processes often improves security over ad-hoc internal practices.
What does good look like in month three?
Stable ticket volumes, >95% patch compliance, tested backups, clear monthly reports, and an agreed roadmap of improvements tied to business outcomes.
