The Cost-Benefit Analysis of Outsourcing Your FH IT Management (And Why Most Funeral Homes Get It Wrong)
In-house IT staff: $60K-$100K+/year + benefits. Managed IT provider: $300-$800/month. For most funeral homes, outsourcing costs 50-75% less AND provides better security.
Key Takeaways
• In-house IT: $60K-$100K/year salary + $10K-$20K benefits/training• Managed IT provider: $300-$800/month ($3.6K-$9.6K/year)• Savings: 70-90% cost reduction for outsourced option• Security: Managed IT includes proactive monitoring, backups, compliance (in-house rarely does)
Why IT Matters for Funeral Homes
Your funeral home's IT infrastructure holds everything: client records, payment information, service schedules, financial data. If IT fails—or if data is compromised—your entire business stops. Unlike other businesses, funeral homes cannot miss a funeral service. A data breach or IT failure means immediate liability, regulatory penalties, and reputation damage.
Yet most funeral homes make IT decisions based on gut feeling, not economics. They hire a part-time tech person (often unqualified) or try to manage IT internally, not realizing they're building expensive, fragile systems.
This article breaks down the REAL costs and risks of both approaches so you can make an informed decision.
In-House IT: The True Cost
Most funeral homes underestimate in-house IT costs because they only count the salary. The real picture is much worse:
Managed IT Provider: What's Actually Included
A managed IT provider (MSP) bundles all these services into one monthly fee. Here's what you get:
✓ 24/7 monitoring of all systems
✓ Automatic backup & disaster recovery
✓ Antivirus, firewall, threat detection
✓ Software updates and patches (automatic)
✓ Help desk support (phone/email/chat)
✓ HIPAA compliance audits & documentation
✓ Proactive security audits
✓ Network monitoring & performance optimization
✓ Access control & password management
✓ Incident response (if breach occurs)
The Real Financial Comparison
Category: Direct Cost
- In-house: $68,920/year
- Managed: $6,000-$9,600/year
- Savings: $59,320-$62,920 annually (86-91% reduction)
Category: Security & Compliance
- In-house: One person, knowledge gaps, no 24/7 monitoring, HIPAA risks
- Managed: Team of experts, 24/7 monitoring, proactive threat detection, HIPAA-compliant documentation
- Risk comparison: In-house = high breach risk; Managed = professional-standard security
Category: Compliance & Audits
- In-house: Compliance is not a specialty; gaps in HIPAA/data security documentation
- Managed: Compliance audits built-in; documentation for regulators
- Penalty risk: In-house gaps = $100-$50,000 per HIPAA violation
Category: Availability & Disaster Recovery
- In-house: One person (single point of failure); if they're sick/quit = no support
- Managed: Redundant team, SLA guarantees (typically 99.5% uptime), disaster recovery plan
- Downtime risk: In-house = unplanned outages cost $500-$1,000/hour in lost revenue
Category: Scalability & Future Growth
- In-house: As you grow, you need more IT staff (multiplying costs)
- Managed: Same cost regardless of growth; provider handles scaling
Real-World Case Studies: What Funeral Homes Actually Saved
Case 1: Small Funeral Home (2 locations, 6 staff)
Scenario: Hired part-time IT tech, paying $45/hour for 25 hrs/week
In-house cost: $58,500/year (salary + benefits + tools)
Switched to managed IT: $600/month = $7,200/year
Annual savings: $51,300
Additional benefit: No more IT emergencies at 6pm on Friday. Managed provider handles everything 24/7.
Case 2: Mid-size Funeral Home (1 full-time IT person)
Scenario: Full-time IT director, $70K salary + $15K benefits = $85K/year
In-house cost: $85,000 + software/hardware + training = ~$95,000/year
Switched to managed IT: $800/month = $9,600/year
Annual savings: $85,400
The math: Director was handling basic tasks (password resets, printer fixes) that managed IT automates. Director's expertise was underutilized for the company size.
When Should You Keep In-House IT?
In-house IT makes sense only if:
- You're a large funeral home (50+ staff) with complex, specialized systems that need full-time expertise
- You have a highly skilled IT person (not just someone who "knows computers") who can handle security, compliance, and architecture
- You need immediate, on-site IT response for specialized equipment or infrastructure
For 95% of funeral homes, this doesn't apply. Most funeral homes are small to mid-size and use standard software (Sacred Grounds, QuickBooks, Microsoft 365). Managed IT providers specialize in exactly this.
The Hybrid Approach: Managed IT + Part-Time Internal
Some funeral homes use a hybrid: managed IT provider for all infrastructure/security, plus a part-time person for specialized tasks (equipment troubleshooting, vendor coordination, specific internal projects).
Cost: Managed IT ($6-10K) + part-time support ($15-20K) = $21-30K/year vs $68K in-house
Benefit: You get 24/7 expert security + some local support, at half the in-house cost
How to Choose a Managed IT Provider
Must-Have Criteria:
- HIPAA certification: Ask directly: "Are you HIPAA-certified? Do you have documentation?" If they say "kind of" or "we handle it," walk away.
- 24/7 monitoring: Your data needs protection even at 2am. Don't accept 9-5 support.
- Backup & disaster recovery: Ask: "If our primary server fails, how long until we're back up?" The answer should be minutes, not hours.
- References from other funeral homes: Call them. Ask about uptime, support quality, and security.
- SLA (Service Level Agreement): In writing. Guarantees 99.5%+ uptime and specifies response times for outages.
- Transparent pricing: Should know what you're paying for. Avoid surprise "emergency fees" or hidden costs.
Red Flags to Avoid:
- "We handle HIPAA compliance" but can't show documentation or certifications
- Only office hours support (no 24/7 monitoring)
- Vague pricing or talk of per-incident charges
- No backup strategy or disaster recovery plan
- Can't provide references from other funeral homes
- Pressure to sign long-term contracts (3+ years) or early termination fees
Hidden Benefits of Managed IT Beyond Cost Savings
1. HIPAA Compliance Documentation
Managed IT providers provide audit trails, access logs, and security documentation. When a regulator asks "show me your security," you have evidence. In-house IT? You're scrambling.
2. Disaster Recovery
Your data is automatically backed up to secure, geographically distant locations. If a server fails or ransomware strikes, your data is intact. In-house IT often has backups on the same network (useless in a breach or hardware failure).
3. Liability Reduction
If a data breach occurs and regulators investigate, a managed IT provider with documented compliance practices protects you. In-house IT with gaps? You're liable.
4. Peace of Mind
You know your systems are monitored 24/7. No more calls at midnight about IT emergencies. Your director can focus on funerals, not servers.
The ROI Calculation: What You're Really Saving
Annual savings from managed IT: $50K-$60K
Intangible savings:
- Reduced breach risk (avoiding $100K-$500K+ breach costs)
- Avoided HIPAA violations ($100-$50K per violation)
- Less downtime (each hour of downtime costs $500-$1,000 in lost revenue)
- Better security = families trust your business
5-year ROI: For an average funeral home, switching to managed IT returns $250K-$300K in direct savings PLUS eliminates catastrophic breach risks.
Implementation: How to Transition to Managed IT
Timeline: 2-4 weeks
- Week 1: Interview 3-4 managed IT providers, check references, sign agreement
- Week 2: Provider conducts IT audit (discovers vulnerabilities, documents current systems)
- Week 3: Provider implements baseline security (updated passwords, backups, monitoring)
- Week 4: Full transition complete; monitoring active 24/7
Related Data Security Resources
- HIPAA Data Security Best Practices – Comprehensive compliance checklist
- Multi-Factor Authentication Guide – Critical security control your provider should implement
- Avoiding Single Points of Failure – Backup strategy overview
- CMS HIPAA Security Rule – Federal security requirements
Bottom Line
Managed IT is cheaper ($6-10K vs $70K+ annually), more secure (24/7 monitoring vs. one person), and includes HIPAA compliance. The financial case is clear: you save $50K-$60K per year AND eliminate catastrophic breach risks. For a funeral home, this is the easiest decision to make.
Action items: (1) Get quotes from 3-4 managed IT providers (ask for funeral home references). (2) Ask specifically about HIPAA certification and 24/7 monitoring. (3) Compare total cost including downtime risk. (4) If currently in-house, schedule transition within 30 days. (5) Allocate the $50K savings to growth (marketing, staff, technology).