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Business Development Rants and Resources

The High Cost of In-Sourcing

Let’s not consider, for now, of the normal outsourcing argument, that often it is possible to save significant money by using outside assistance from people who are set up to do whatever it is that needs doing. To do that kind of outsourcing is often (but not always!) a no-brainer.

Let’s talk about other cases, though. I recently worked with a company whose overarching philosophy was to do everything in-house, presumably with the simple view that “We already have these people, and they have talent, so why should we spend additional money by outsourcing?” Or, in the case of technology, “We can figure out this problem on our own. There are lots of good resources out there.”
This latter point really does resonate with me. It is almost always true. In fact, for the sake of this article, let’s dwell on that.The vast majority of people in the U.S. that are involved in IT have zero formal training in it. And we are not talking about your brother-inlaw that somehow cobbled together a web site for his company. This group also includes real, highpowered techies and tech business visionaries. Got a problem? Google it. And then maybe you’ll end up joining one of the hundreds of great technology forums that address every popular area of IT, inhabited by lots of people that are willing to share their knowledge.

But there are a few reasons why straightup outsourcing of your technical issue is a better choice, despite the availability of these awesome resources:

  1. Faster time to market implementation. Often, all of the flailing around trying to cobble together a solution has measurable opportunity cost. And when I say “often”, I really mean “anytime you are doing this as part of some business objective, rather than a) for your health, or b) to make the world a better place”. Why not just go and get the thing done and move on to meet your objective, within your company’s’ core competencies?
  2. To answer questions that you do not know enough to ask, or at least had not thought of asking. I have used technical forums many times, and my question was answered and then I successfully moved from Challenge 97 to Challenge 98, moving across the raging river on those slippery stones hoping to make it to the other side. I have also, by necessity, given whole projects to outside firms. I was happy I did because as I subsequently looked at what they did, and I learned techniques that I would have never used or even thought about. That knowledge was integrated into dozens of other existing processes, greatly benefiting my organization.
  3. To develop a relationship and a backstop for times of need. Business relationships, especially tactical ones that center around complex solutions, take some time to develop. When things go bad, VERY bad, you cannot just start dialing numbers from the Yellow Pages and yelling “HELP”. The value of someone that knows you, and has not only a vested relationship with you and your company, but also some knowledge of how you are doing things, cannot be overstated. So starting with your next challenge, consider picking someone else’s brain. Maybe you’ll take on the next dozen on your own, which is great. But when you find the right outside resources, you will quickly see how you can benefit.

March 28, 2012 - Posted by | Business Building

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