This article will explain what IT services are, what types exist, the different ways to purchase and organize IT services, and the advantages that effective IT services bring to your company.
In 2023, digital transformation of business is no longer nice-to-have but a must-have to stay at least on par with competitors. From customer communication to warehouse inventory management to bookkeeping and taxes—even basic business processes require some technical expertise.
For a business owner, IT may seem like unfamiliar territory. Yet, regardless of your inclination towards delving into IT, downtimes caused by IT issues cost real money. Business owners increasingly understand they can’t handle these issues on their own—look at the growing spending of SMBs on IT services. The IT services market is vast, and choosing the appropriate provider and deciding which services to prioritize can be pretty perplexing. Moreover, the question arises whether a provider is needed at all. Can a business survive relying on its internal IT resources and the necessary software?
Are you looking for an effective IT service management structure for your organization? You’re in the right place! In this article, we’ll explain what IT services are, what types exist, the different ways to obtain them, and the advantages that effective IT services bring to your company.
Let’s start by defining the critical components of the enterprise’s IT infrastructure: hardware, software, processes, network communications, and data.
Now, the term IT services covers all the value that businesses can receive from software, hardware, data, and the labor of IT specialists. The company usually receives IT services through some provider, represented by an in-house IT team or an external IT services firm. We’ll go through the pros and cons of IT outsourcing later in this article.
It is essential to understand that there are various forms of IT service management. For teams of less than 20 people, for example, a combination of software, hardware, and one part-time technician can be enough to cover their IT needs. The concept of IT services should not be solely associated with outsourcing or hiring a large IT department.
“We suggest looking at IT services from two perspectives: their objectives and their delivery methods,” says Ivan Samoylov, CTO of Alloy Software.
According to Statista, “the broader market for IT services is made up of several segments, including outsourcing, managed services, security services, data management, and cloud computing.” Another notable classification differentiates between business process services, application, and infrastructure services and is based on the different functions and roles that IT services play within an organization. However, all that might sound too complex for a non-technical person searching for an IT partner.
“We suggest looking at IT services from two perspectives: their objectives and their delivery methods,” says Ivan Samoylov, CTO of Alloy Software. From this viewpoint, IT services can be divided into the following groups:
Let’s consider each of the groups in more detail.
These services immediately target outcomes significant for the business. Recipients of this type of service are specific individuals within the company. For example, human resources information systems (HRIS) aim at business-critical targets like lower employee turnover, higher employee satisfaction, and a more transparent recruitment process. Further examples of IT services targeting business value include:
Another group of IT services targets the organization’s IT infrastructure, performance, and stability. No specific people would immediately receive these services, but by improving the IT infrastructure, consumers can get better services in other areas. Here are some examples of IT services targeting the organization’s IT infrastructure:
Improving IT infrastructure performance is also necessary to achieve business goals, although this impact is not directly observable.
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No matter what they are aimed at, business performance, or IT infrastructure stability, IT services also differ by their delivery method.
Here are some examples of IT services delivered by an in-house team:
We’re breaking down the different types of external IT partnerships below. Their services might be:
SaaS delivers fully functional software applications over the internet on a subscription basis. Users can access the software through a web browser without installing or maintaining it locally.
PaaS provides a platform and environment for developers to build, deploy, and manage applications without worrying about the underlying infrastructure. PaaS offers tools, services, and frameworks to facilitate application development and deployment. Developers focus on coding and application logic rather than infrastructure management.
We believe there is no right or wrong IT services solution. The perfect form for you depends on your budget, the scope of tasks, and the control level you want over IT.
Many business owners wonder whether they should partner with an outsourcing company, hire a dedicated in-house IT team, or if a couple of freelancers would be enough for their IT needs. We believe there is no right or wrong answer to this question. The perfect form for you depends on your budget, the scope of tasks, and the control level you want over IT. Below, we discuss the most popular IT partnership models, their advantages, and limitations.
IMPORTANT: The terms that we’re bringing below are widespread but not canonical. IT service providers may use different names for their business models and services. Keep this in mind when selecting a contractor.
Nonetheless, it’s helpful to be aware of typical terms for various forms of partnership. The most popular ways of IT partnerships are the following.
An in-house IT team refers to a group of dedicated technology professionals employed directly by the organization. These experts manage all aspects of the company’s IT infrastructure, including network administration, software development, system maintenance, and user support. In-house teams offer the advantage of close alignment with the company’s goals and processes, allowing for tailored solutions and immediate response. However, they may require significant recruitment, training, and overhead costs.
For managing an internal IT team, you might consider tools like Alloy Navigator—a comprehensive IT service management suite. Connect to our sales team to learn more.
| Advantages of an in-house IT team | Limitations of an in-house IT team |
|---|---|
| Immediate Availability: In-house IT teams are readily available within the organization, allowing quick response times and direct support when technical issues arise. | High Costs: Maintaining a full in-house team can be costly due to salaries, benefits, training, and infrastructure expenses. |
| Greater Control: You will have direct control over the priorities and strategies of an internal IT team. This level of control can be critical for maintaining the organization’s unique identity and achieving specific objectives. | Limited Scalability: Scaling up or down quickly to accommodate changes in demand can be difficult with an in-house team. When a specific skill is needed for a new project, hiring a specialist with this skill will take time. Similarly, finding a replacement is also time-consuming when someone leaves. While external providers usually have higher flexibility. |
| Cultural Alignment: In-house teams often work hand in hand with other teams and the management, which can result in better alignment between IT initiatives and the organization’s overall mission. | Resource Constraints: In-house teams may struggle to handle multiple tasks simultaneously, leading to delays or reduced quality. |
| Tighter data protection: When the organization deals with highly sensitive data that requires strict control and security, an in-house team can provide faster data protection. |
Outsourcing is a term typically used to describe a partnership in which businesses contract third-party companies or individuals to provide IT services. Companies more often choose to outsource tasks that are outside their core business. Outsourcing typically emphasizes a specific job or set of functions. This approach offers flexibility by tapping into specialized expertise without requiring extensive in-house resources. However, it may require effective communication and management to ensure alignment with organizational needs.
| Advantages of IT outsourcing | Limitations of IT outsourcing |
|---|---|
| Focus on Core Business: Outsourcing IT functions allows organizations to focus on core competencies and strategic initiatives, leaving IT management to experts. | Loss of Control: Organizations may have less control over the quality, speed, and execution of IT tasks when working with external providers. |
| Cost Savings: Outsourcing can lead to cost savings by reducing overhead costs associated with maintaining a full-time in-house team, such as salaries, benefits, and infrastructure. | Security Concerns: Sharing sensitive data with external providers may raise security and data privacy concerns, primarily if not adequately managed. |
| Specialized Expertise: Outsourced teams often bring technical skills and knowledge in specific areas, providing access to expertise that may be lacking in-house. | Dependency on Third Parties: Over-reliance on external providers can create vulnerability if the provider faces disruptions or changes. |
Managed IT services providers are external firms that proactively manage and monitor an organization’s IT infrastructure. They offer various services, from network monitoring and security to data backup and cloud management. Unlike outsourcing, where payments are project-based, this model is often subscription-based. MSPs distinguish themselves by focusing on preventive maintenance rather than reactive measures.
| Advantages of MSP | Limitations of MSP |
|---|---|
| Cost Predictability: MSPs often operate on a subscription-based model, providing predictable monthly costs. | Communication Challenges: Effective communication can be challenging when working with remote MSPs, potentially leading to misunderstandings. |
| Comprehensive Expertise: MSPs offer a wide range of IT services and expertise, covering various areas such as network management, cybersecurity, data backup, and more. | Dependency on Third Parties: Organizations can become dependent on MSPs for critical functions, creating vulnerability if the provider faces disruptions. |
| Proactive Maintenance: MSPs focus on preventive maintenance and proactive monitoring, minimizing potential IT disruptions and downtime. |
IT consulting involves hiring experts or firms to provide strategic advice and guidance on technology-related matters. Consultants assess an organization’s IT needs, recommend solutions, and help plan and implement technology. This approach is valuable for organizations seeking specialized knowledge or facing complex technology challenges. Consultants provide insights, best practices, and industry expertise to enhance IT strategies.
| Advantages of IT consulting | Limitations of IT consulting |
|---|---|
| Quick Access to Knowledge: Consultants bring industry best practices and up-to-date knowledge, helping organizations stay current with technological advancements. | Limited Hands-On Execution: Consultants may provide recommendations but not execute the actual implementation, requiring internal resources for execution. |
| Unbiased Perspective: Consultants offer an impartial viewpoint, helping organizations identify hidden vulnerabilities and consider alternative strategies. | Integration Challenges: Implementing consultant recommendations into existing processes or systems can pose integration difficulties. |
| Flexibility & Cost Control: IT consultants can be engaged for specific projects or tasks, providing a flexible solution without the long-term commitment of an in-house team. |
Hybrid approaches involve combining multiple methods of IT service procurement to create a customized solution. For example, a company might maintain an in-house IT team for day-to-day operations while outsourcing specific tasks like cybersecurity or custom software development to external specialists. A significant number of businesses now opt for a hybrid approach when procuring IT services. It allows businesses to leverage the benefits of both worlds, balancing control, flexibility, and expertise.
From the list of IT services discussed above, it must be evident that almost any service valuable for a business is currently an IT service. If you still doubt the ROI of investments in IT services, let’s take a closer look.
IT services leverage technology to address diverse challenges and opportunities, leading to tangible benefits that propel organizations forward:
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A unified approach to designing, implementing, managing, and improving IT services in the organization.
Learn about IT support—one of the practices of IT services distribution and maintenance.
A self-service portal is the 24/7 point of contact between the IT department and users, serving self-help issue resolution tools to free up some of your team’s time.
