For businesses with 20–100 employees, managed IT services are often more cost-effective and scalable than hiring internal IT staff. Internal IT typically involves higher fixed costs, limited coverage, and reliance on a single individual, while MSPs provide access to a broader team, structured processes, and proactive support. The right choice depends on business complexity, risk tolerance, and the level of security and compliance required.
For organisations operating in regulated industries, outsourced IT models often offer stronger governance, security, and operational resilience.
As businesses grow, technology becomes more complex and increasingly critical to daily operations. At some point, many organisations face the decision: should we hire internal IT staff or partner with a managed service provider?
Both models have advantages, but the right choice depends on cost, risk, scalability, and the level of support required.
For most growing businesses, the decision is less about preference and more about operational maturity, risk management, and the ability to support systems consistently over time.
Hiring internal IT staff involves high fixed costs.
This typically includes salary, superannuation, training, recruitment, and tooling.
For many small to mid-sized businesses, a single IT employee can cost $90,000 to $140,000 per year, before additional overheads.
Managed IT services, on the other hand, are typically priced per user. For businesses with 20–100 employees, this often falls within the $120–$200 per user per month range, depending on service level and security requirements.
For a deeper breakdown of pricing structures, it may help to review how much managed IT services cost in Australia.
Internal IT teams often consist of one or two individuals.
This creates limitations such as:
Managed IT providers operate with teams, enabling continuous coverage, broader skill sets, and structured escalation.
This reduces reliance on individuals and improves consistency of support delivery.
Modern IT environments span cloud platforms, cybersecurity, networking, compliance, and backup systems.
It is difficult for a single internal resource to maintain deep expertise across all of these areas.
Managed IT providers offer access to specialists across multiple disciplines, enabling organisations to benefit from a broader, more current skill set.
Cybersecurity is now a core business risk, not just a technical function.
Maintaining consistent protection requires structured processes, continuous monitoring, and specialised expertise.
Internal IT teams often face challenges keeping up with evolving threats, particularly when resources are limited. This can lead to gaps in monitoring, patching, and incident response.
In more mature environments, cybersecurity is managed through defined processes and dedicated tooling. This typically includes continuous monitoring, vulnerability assessments, structured patching, and incident response procedures.
With these controls in place, organisations are better positioned to detect and respond to threats early. In some environments, incidents can be identified and contained within minutes, significantly reducing impact.
For organisations with higher regulatory requirements, understanding cybersecurity for regulated businesses and how structured controls are applied can help.
As businesses grow, their technology requirements evolve.
Internal IT models can struggle to scale due to hiring delays, limited capacity, and budget constraints.
Managed IT services provide flexibility, allowing organisations to scale support in line with business needs.
This is particularly valuable for businesses experiencing growth, change, or increasing operational complexity.
Organisations operating in regulated industries must meet strict compliance requirements.
This often includes maintaining documentation, managing risk registers, aligning with frameworks, and preparing for audits.
However, many organisations lack the internal resources to manage these processes effectively.
In fact, assessments across multiple environments show that approximately 95% of businesses lack the formal documentation required to properly manage compliance risks.
Managed IT providers with experience in regulated environments can help establish and maintain these governance structures.
Downtime can have a significant financial impact.
For many businesses, downtime costs can range between $30,000 and $95,000 per incident, depending on size and industry.
Internal IT models may rely more heavily on reactive support, increasing the risk of disruption.
Managed IT environments typically prioritise proactive monitoring and maintenance, helping reduce downtime and improve reliability.
In some structured environments, downtime has been reduced by as much as 95% compared to reactive models.
There are scenarios where internal IT may be the right choice.
This can include very large organisations, businesses requiring full-time onsite presence, or those with highly specialised internal systems.
Even in these cases, internal teams often rely on external providers for specific functions such as cybersecurity or infrastructure management.
Many organisations adopt a hybrid model, combining internal IT with external support.
This approach allows businesses to retain internal knowledge while gaining access to specialist expertise and improved coverage.
Hybrid models are often used to strengthen security, improve governance, and support strategic initiatives.
The decision between internal IT and an MSP depends on several factors, including business size, complexity, risk tolerance, compliance requirements, and growth plans.
For many organisations in the 20–100 employee range, managed IT services provide a more scalable and resilient approach.
For many businesses, the decision becomes clear when internal limitations begin to impact reliability, security, or the ability to scale effectively. The right choice is not based solely on cost, but on the level of structure, consistency, and risk management required.
There is no one-size-fits-all answer to IT support.
However, as technology environments become more complex and security requirements increase, many growing businesses are moving towards managed IT models that provide broader expertise, stronger security, and more predictable outcomes.
Understanding the trade-offs between internal IT and managed services helps organisations make a more informed decision aligned with their long-term goals.
If you are evaluating your options, it may also help to review how to choose the right MSP for your business.
Is internal IT cheaper than an MSP?
Not always. While internal IT may appear cheaper initially, the total often increases when factoring in salaries, training, tools, and limited coverage.
Can MSPs replace internal IT completely?
In many cases, yes. However, some organisations prefer a hybrid model depending on complexity and internal requirements.
What is the biggest advantage of an MSP?
Access to a broader team, structured processes, and more consistent support delivery.
When should a business move to managed IT?
Typically during growth phases, when systems become more complex and require more structured support.
Choosing between internal IT and a managed service provider can be complex, particularly when balancing cost, risk, and long-term scalability.
If you are currently weighing this decision, understanding where your environment sits today is the first step.
Step Fwd IT works with organisations to assess their current environment, identify gaps, and determine the most effective support model.
If you would like a clearer view of which approach best suits your organisation, you can request a Managed IT Strategy Review or explore Managed IT Services.
