Internal IT hire or managed partner? Two different problems
The choice between hiring in-house and outsourcing isn't really about cost. It's about the kind of work you need someone to own.
Somewhere between 80 and 250 staff, most businesses hit the same fork. Do you hire an internal IT lead, or do you bring in a managed partner? The default answer is usually 'both, eventually'. The better question is which one first, and what each one is genuinely for.
Get it wrong and you'll end up with an expensive person doing a job they shouldn't, or an outsourced contract delivering everything except the bit you actually needed.
What each one is actually for
An internal hire is for context. They sit in your meetings, learn the politics, translate between the business and whoever delivers the work. They notice when the sales director is unhappy with a tool before it shows up in a survey. They make sure the IT roadmap reflects the business roadmap rather than running parallel to it.
A managed partner is for capability and coverage. They give you 24/7 hands, deep Microsoft expertise across more disciplines than any single hire can carry, and a team you don't have to recruit, train, retain or replace when someone leaves.
Use them for the same thing and you'll be disappointed by both. The internal hire ends up firefighting tickets and never gets to the strategic work. The partner ends up trying to read the company politics they can't see and getting it wrong.
A practical rule of thumb
If the next twelve months are mostly about stabilising and running the platform well, lead with a managed partner. The work is mostly operational, and a good MSP will be cheaper, faster and more resilient than a single hire trying to cover service desk, security, backups, networking and Microsoft 365 administration on their own.
Add an internal hire later, in a coordination role: IT manager, head of IT, or fractional CIO depending on size. Their job is to own the partner relationship and translate to the business.
If the next twelve months are mostly about a programme of change tightly tied to the business - a new ERP, a merger, a regulated rollout - lead with the hire. You need someone with skin in the game and a desk in the building. Bring the partner in around them to deliver the technical workstreams.
What gets people stuck
Two patterns repeat. The first is hiring a single 'IT manager' and expecting them to be everything: helpdesk, security analyst, M365 administrator, project manager and strategist. That role doesn't exist as a competent single hire. It exists as a team.
The second is signing a managed contract that's defined entirely in tickets and SLAs. The partner hits all the targets, but nothing strategic moves because nobody's job description includes it. The business slowly concludes that IT is reactive, and starts working around it.
What a good combined model looks like
A workable mid-market model is one internal IT lead (or fractional CIO for smaller businesses), a managed partner running the operational stack, and a clear separation of decision rights.
The internal lead owns roadmap, budget and vendor selection. The partner owns delivery, support and engineering. Both attend the monthly service review. The internal lead is the customer; the partner is accountable to them, not directly to the business.
That model scales from about 80 staff up to several hundred without significant change. Above that, the internal team grows and the partner relationship tightens around specialisms.
The cost conversation
Cost matters, but it's the wrong place to start. A fully-loaded mid-level IT manager is comfortably north of £70k a year. A managed contract for a similar-sized business often lands in the same range, with a much wider capability surface.
The honest comparison isn't person versus contract. It's what you're trying to achieve, what coverage you need out of hours, and how much you're willing to depend on a single person who could leave.
How to decide
Write down the three most important IT outcomes for the next year. If they're mostly operational - keeping things running, tightening security, sensible Microsoft 365 - lead with a partner. If they're mostly change - replacing a core system, merging with another business, moving regulated workloads - lead with a hire.
Then assume you'll need both eventually. Sequence rather than choose.
The signal that you're ready to add the other side
If you started with a managed partner, the signal to hire internally is usually a backlog of small strategic questions that the partner can't answer for you because they require company context. Tooling choices that depend on culture, vendor selections that need to reflect politics, roadmap calls that need a person at the leadership table.
If you started with an internal hire, the signal to bring in a partner is usually that the hire is being eaten alive by operational work. Tickets, password resets, laptop builds and out-of-hours incidents are pulling time away from the strategic work you hired them to do. That's the moment to take the operational load off them.
Neither signal arrives at a tidy moment. Both are visible if you're paying attention to where the time actually goes.
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