The Conversation That Goes Awry

"That's much more expensive than our in-house solution!"

That's what the CFO hears when an outsourcing offer is on the table. The monthly sum looks impressive.

But are you really comparing apples to apples?

This is the biggest problem with this decision. The outsourcing provider tells you their service fee. Clear, transparent, monthly.

The costs of your in-house IT? They are hidden everywhere. In the system administrator's salary. In infrastructure costs. In licenses you haven't needed for two years. In turnover that hits you every year.

An honest Total Cost of Ownership analysis reveals what you're really paying.

(The results are often surprising. In both directions.)

What In-House Really Costs

Let's be honest: In-house IT has advantages. But it also costs real money. Most CFOs greatly underestimate this.

Salaries are just the beginning

A typical team of four people: IT manager, two admins, one technician. Salaries? Maybe 250,000 francs per year.

But wait. To this add: employer contributions. Pension fund. Training. Insurance. Suddenly you're at 350,000.

Infrastructure is always running

Servers, backup systems, network equipment. Storage. Telephony. Power for the server room. Cooling.

That's quickly 50,000 to 150,000 francs per year - depending on complexity.

Licenses pile up

Operating systems, virtualization, backup, security, collaboration tools. Maybe database licenses.

Somewhere between 30,000 and 100,000 francs per year.

The hidden costs

Here's where it gets really expensive.

An employee resigns? Recruiting costs 10,000 to 20,000 francs. Plus onboarding. Plus productivity loss.

Unexpected outages? A major incident can quickly cost 50,000 francs. Or more.

Vacation and illness? Your team is not available 365 days. But systems must still run.

Scope creep? Your IT team is asked for everything. "Can you just quickly..." This pulls away 10-20% of capacity.

The honest sum

For a four-person team, you're quickly at 500,000 to 600,000 francs per year.

That's about 140,000 francs per person. Much more than just the salary.

What Outsourcing Really Costs

Outsourcing seems attractive. Fixed fee, no surprises.

Is that true?

The service fee is just the beginning

An MSP for 50-100 employees? Maybe 60,000 to 150,000 francs per year.

But: out-of-scope work is added. Everything not in the SLA. Additional licenses from the provider.

Reality: 70,000 to 200,000 francs per year.

Transition costs

When you switch, moving costs arise. Data migration. Knowledge transfer. Parallel operation. Training your team.

One-time: 50,000 to 150,000 francs. Spread over three years.

Someone must manage the provider

The most common mistake: "We don't need an IT manager anymore."

Wrong. You need someone to manage the provider. To review contracts. To escalate issues. To ensure SLAs are met.

That's 30,000 to 80,000 francs per year - for a person doing it on the side, or partially.

The hidden costs

"That's not included in the service" - and suddenly you're paying extra.

Communication overhead. You're not allowed direct access to the server. Tickets take longer.

SLAs not as good as they look on paper.

Vendor lock-in. You're stuck with the provider. Switching is expensive.

The honest sum

For the same scenario: 250,000 to 350,000 francs per year.

It's cheaper than in-house. But not as cheap as the service fee suggests.

When Outsourcing Makes Sense

Outsourcing is not the solution for everyone.

You should outsource when:

IT is not your competitive advantage. You need it for basic processes, but not for differentiation.

You're growing quickly. In-house scales poorly. With an MSP, costs grow more slowly.

You're struggling with IT recruitment. Good people are expensive and scarce.

You need 24/7 support. Without in-house on-call duty.

Your margins are thin. Outsourcing makes IT costs variable and predictable.

You should keep in-house when:

IT is your core business. A SaaS company, a fintech - there IT is not support, but product.

You have highly complex requirements. Custom software, specialized systems.

Security is critical. Banks, healthcare, regulated sectors.

You already have a strong team. That's an asset, not a cost center.

You need quick responsiveness. The delay due to ticketing is not acceptable.

The Most Common Mistake

The biggest mistake with this decision: Only comparing the obvious costs.

Service fee vs. salaries. That's like comparing apples to oranges.

The real question is: What does it cost over three years, all included?

Transition. Management overhead. Hidden costs. Risks.

And: What does the solution give you that you need? Control? Flexibility? Scalability?

A company that grows quickly has different requirements than one that remains stable.

(It sounds obvious. But you'd be surprised how often this analysis is skipped.)

Conclusion

IT decisions are financial decisions. And as with all financial decisions, transparency is your advantage.

The question "Outsourcing or In-House?" has no blanket answer. But with an honest TCO analysis, you can make the right decision for your company.

In-house is more expensive than it looks. Outsourcing is cheaper - but not as cheap as the fee suggests.

Companies that understand this don't compare fees. They compare total costs. Over years. With everything that involves.

It's not sexy. But it makes the difference.

Want to know what's cheaper for your company? We conduct TCO analyses for Swiss companies - honest and without a sales pitch. Talk to us.