By November 19, 2013 0 Comments Read More →

In-House or Outsource? The Right Answer

In-House or Outsource? The Right Answer

There are many debates about whether to outsource or manage in-house, whether full-outsourcing or subcontracting separate services.

It's always amusing when someone, usually someone with experience only on one side of the equation, or someone selling procuremement or outsourcing services, says that one way is better than the other.

Having been in-house, with an outsourcing company and as a subcontractor in the past, I understand the differences, the benefits and drawbacks from an ‘on-the-ground’ perspective.

As a consultant, I've conducted outsourcing initiatives, written RFP’s (and written bid responses for outsourcing companies), evaluated bid responses for clients, been involved in major outsourcing initiatives from both sides. I've also conducted studies for clients that both recommended and didn’t recommend outsourcing or subcontracting. I have a sense for the differences from a business decision perspective.

In fact, I recently finalized a business case to in-source a currently subcontracted service for an organization, and it’s a compelling case. I also analyzed the financial case for outsourcing for another client and while the numbers prove it-in, there are other issues that outweigh cost savings so they are unlikely to pursue the outsourcing option. I've also analyzed operations and justified outsourcing which the client pursued and according to them, it was a success.

As you can see, it depends.

Anyone who has a one-size-fits-all solution doesn’t have your interests in mind. Each organization and each situation is different, so like many other things, the decision to outsource has to be made differently. What works for one company may not work for another.

Even so, as a Manager, you should always consider the options and decide with all the information at your disposal, not just with emotions or a cursory review. Look at it closely, assess it objectively, consider your priorities, analyze the financial implications, tabulate the risks, review the opportunities and market capability.

Then make your decision, not before.

And that’s the right answer.

About Michel Theriault

Michel is the founder of Success Fuel for Managers. He is an author, speaker and consultant focusing on topics relevant to Managers and aspiring Managers in businesses of all sizes who want to get results, get attention, and get ahead. He is also a contributor to Forbes and AllBusiness Experts . Michel is available for speaking engagements, training and consulting. Connect with him or send an email.

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