Why we outsource IT: Focus, efficiency, and the business case for letting go

Outsourcing IT can make a lot of sense, but it comes with both gains and trade-offs. In this blog post, our CTO Benny Olsson will talk about how and why Norce a few years ago chose to outsource all internal IT operations and share some lessons learned along the way. 

At Norce, we develop and maintain a leading SaaS platform for digital commerce, but running a successful SaaS business requires more than just great software. Managing internal IT – email, licenses, devices, and support – can be a significant time drain, diverting valuable focus and resources from our core business. By outsourcing IT operations, we can better allocate our time and energy to what truly matters. Selecting a reliable partner is key, providing us with the peace of mind knowing that IT just works – and when it doesn’t, help is just a phone call or a helpdesk ticket away. 

The problem: IT as an internal distraction

Internal IT at Norce covers pretty much everything except for the infrastructure used for hosting our ecommerce platforms. It includes managing hardware such as laptops, phones, and peripherals, providing general IT support for employees, general infrastructure maintenance (email, identity management, VPN, etc), and a bit of compliance and security related activities. 

Managing all of this became more and more of a distraction and a burden that affected efficiency and well-being among the employees in IT operations as our company grew. 

Before we outsourced IT, we often found ourselves in situations where managers would spend time on leasing agreements and engineers spent time troubleshooting email issues or fixing devices instead of coding. Add to that the need to keep at least some level of redundancy of the competency needed to keep things going in IT.

Why we outsourced IT

For a company of Norce’s size – i.e. too small to have more than a one-person IT team, yet big enough that someone must take responsibility for IT – the problems we experienced in having an in-house IT team simply weren’t worth the small amount of money we felt we saved. I deliberately use the word “felt” since hindsight has shown us that outsourcing IT actually saved us money, but more on that later.

When taking a holistic view of the situation, as we grew, it really came down to us either investing heavily in our internal IT team and hiring more people to create redundancy at the internal helpdesk or outsource everything related to internal IT operations. We didn’t feel like a middle-ground would be a viable long-term solution, meaning that if we had to do some IT operations ourselves then we might as well do all of it, but we really didn’t want to do any of it, so let’s not. Sounds simple enough... 

By “everything”, we mean:

• Device management, including leasing, hardware support, onboarding/first-time setup, anti-virus, monitoring, compliance, and offboarding.
• Internal infrastructure, e.g. email, identity management, file sharing, and security.
• IT support for employees.
• Licensing and compliance. 

We ended up partnering with a local company, Goodfellows, whose core business is to provide exactly these types of services to companies like ours. Them being located in the same town as one of our offices also meant more opportunities for in-person meetings to discuss problems and solutions. Having Goodfellows onboard instead of dedicating internal resources to IT operations has freed up our employees to focus on what really matters – our product.

The benefits we have seen

Some of the key advantages we’ve seen in outsourcing IT operations to Goodfellows includes:

• More focus on our core business – our engineering team spend almost zero time dealing with internal IT distractions.
• Scalability and flexibility – no need to manage an internal IT team as the company changes in size.
• Cost efficiency – comparing both direct and indirect costs, contrary to expectations outsourcing reduced IT costs.
• Security & compliance – while we may be specialists in SaaS security, that doesn’t mean we’re specialists in corporate IT security. Outsourcing ensures IT security is handled by experts in that specific field.
• Fast support & issue resolution – Goodfellows self-service portal is a quick and easy way to get help fast, regardless of if it involves ordering a new laptop or fixing an email issue.
• Less administration – hardware leasing, setup, support, and offboarding are fully managed by Goodfellows.

Previously, onboarding a new employee meant ordering and manually configuring a laptop and a phone, permissions, email accounts, setting up leasing agreements, etc. Now, it’s handled seamlessly through our IT provider, ensuring that everything is set up and ready by the time the employee arrives. Which wasn’t always the case in the before-days – something that I’m sure most of you have first-hand experience of from your own workplace, current or previous. 

The trade-offs

While outsourcing IT operations has been a Win for Norce, it’s far from a silver bullet and absolutely not for everyone. It’s not a one-size-fits-all solution and it does come with some trade-offs.

Some of the potential downsides that you should be aware of before making the decision to let go of IT operations includes:

• Less direct control over IT policies and configurations – IT providers often insist on managing Entra ID/Active Directory. Letting go of control can be difficult but was worth it for us.
• Vendor dependency – Ensure vendor agreements mitigate risks like bankruptcy or acquisition by an undesirable company. Also make sure that you have a break-the-glass-account, i.e. a super-admin account that should only be used in case of emergency.
• Customisation limitations – Having IT in-house usually means that everything is 100% customisable. Outsourcing may mean that you’ll need to adhere to standard provider packaged solutions, e.g. when choosing what laptops and phones to offer your employees. This isn’t necessarily a bad thing long term, but adjusting to it isn’t always easy in the short run. 

Key takeaways and lessons learned

All in all, outsourcing IT was the right move for Norce, and in hindsight we should have made the change earlier than we did. Change is hard, and I think we thought the trade-offs would be worse than they turned out to be. Is it the right move for your company? I couldn’t say. However, what I can do is to give you some of our key takeaways and lessons learned: 

1. Outsourcing IT freed up internal resources and reduced the overall costs of internal IT.
2. Someone still needs to coordinate with the vendor. In our case, with 60+ employees, that takes 2 hours per month for one of our engineering managers.
3. Spend time choosing the right partner. I can’t stress this enough. Make sure you do rigorous vetting before picking a vendor. It’s as much about finding a vendor with a good cultural match as it is about finding one that offer the services you need.
4. Define a scope and consider the trade-offs carefully before you start looking for a vendor. Knowing what you want before you start window-shopping will make everyone’s life easier.
5. Outsourcing IT is not for everyone! We’ve had great success in our outsourcing journey, but your milage may vary.

Outsourcing IT has allowed us to focus entirely on what we do best – building and improving Norce Commerce. It’s not the right solution for everyone, but it has been a game-changer for us.

Does your company still have an in-house IT team, or have you outsourced? What pros and cons do you see, and what would your team gain by outsourcing IT?