The in-house or outsourcing Dilemma

The in-house or outsourcing Dilemma

When facing new needs to simplify a process or access new services, the question often comes whether the work should be done in-house or outsourced to a specialised company. Several configurations can happen:

  1. An organisation with a strong culture of outsourcing. Typically, it can be service providers who are already offering a service to outsource. They understand the value of focusing on what is core and admit that other players who are only doing one thing will be stronger. In practice, the organisation will be a combination of different services that work all together. In the end, it will look like an application store which gives access to different services in-house or externally. Key advantage: you can do some plug and play to add/remove what you want.
  2. All in-house behaviour: this reflects the mental shortcut of “we can do it ourselves”. There can be several reasons to think this way:
  • I have too many resources and can afford to spend an abnormal amount of money on a solution which could have been more efficient externally
  • The mistake to under-estimate the amount of work to achieve the goal
  • What comes from the outside is bad
  • “the others use this but I am special”
  • Internal development teams who see a potential new interesting project and want to take over on the project to have some fun.
  1. Mixed in-house and external services: this practice reflects the thinking that organisations should focus on what they are the most capable. Services or knowledge which are critical for the business are kept in-house while some other services can be outsourced.

For example, at Urbest, we chose to make a selection of different communication tools that work together to be efficient in focusing on processing of tasks, communication, following work done.

We also outsourced payment systems, accounting and legal.

As a result, we have a core team of software engineers combined with operational people focusing only on product and deployment. We arrived to this level of organisation by making successive choices between time to spend versus gain to take a solution ready to use. This is the kind of approach taken by many mono-product companies who will focus very deep and excel in one area.

What do you think of this article in relation to your work environment?