OutSourced vs. In-House Tech Management

As they grow in size, many companies begin seeing value in outsourcing portions of the business (such as technology, marketing, demand generation, and even sales) to take advantage of these specialized skill sets in cost effective manors. After all, hiring someone with 20+ years in almost any professional field is extremely costly, not only in terms of compensation after the fact, but also in terms of time, energy, and the opportunity cost of having to resolve a bad hire.

For all those reasons, it’s not surprising that many organizations begin utilizing outsourced talent. Many businesses often utilize an outsourced team in order to gain access to specialized knowledge sets and skills at a lower cost in order to scale a business.  As a business you can achieve greater flexibility in scaling operations, reduce the burden of recruitment and training, and allow the core team to focus on their core key business activities rather than managing a full set of infrastructure, resources, and processes that are cost prohibitive. 

Key to outsourcing is to manage these outsourced teams based on your business goals and objectives as well as focusing on your key business outcomes. Businesses should look for and identify outsourced teams that have the capabilities of becoming a key strategic partner and mission critical partner for your three to five year business Go-To-Market growth road map. This is about scalability, affordability, and speed to market. The old phrase “timing is everything”, is a key mental model once you are at a certain point with life-cycle in the business. Bringing more functional areas in-house can make sense over time, just ensure that you have laid out a road map focused on business objectives, goals and outcomes. 

Decision about utilizing an Outsourced model vs. In-House models can take multiple forms and are really based on some important business factor considerations. 

As an example: Why would you use an outsourced model for sales or technology offering, there can be several benefits compared to building an in-house model in the current or near term, these include:

1. Cost Efficiency

Reduced Overhead: Outsourcing can significantly lower costs related to salaries, benefits, training, and infrastructure associated with hiring in-house staff.

Scalability: Businesses can scale services up or down as needed without the financial commitment of maintaining a full-time team.

2. Access to Expertise

Specialized Skills: Outsourcing allows access to specialized talent and expertise that may not be available in-house, especially in rapidly evolving fields like technology and sales.

Best Practices: External providers often bring industry best practices and innovative approaches that can enhance efficiency and effectiveness.

3. Focus on Core Business

Increased Focus: By outsourcing non-core functions, businesses can concentrate on their primary objectives and strategic initiatives, leading to better overall performance.

Resource Allocation: Internal resources can be allocated to critical areas that directly impact growth and innovation.

4. Faster Time to Market

Rapid Deployment: Outsourced teams can often deploy solutions or begin sales efforts more quickly than building an in-house team, accelerating time to market for products or services.

Agility: Outsourced partners can adapt quickly to changing needs or market conditions without the lengthy hiring processes associated with in-house teams.

5. Risk Mitigation

Shared Risk: Outsourcing allows businesses to share risks with partners, such as market fluctuations or technology changes, reducing the burden on the internal team.

Contingency Capabilities: External vendors often have contingency plans and resources to address challenges, ensuring continuity of service.

6. Enhanced Flexibility

Adaptability: Outsourcing provides the flexibility to adjust services based on business needs, market demands, or project requirements without the constraints of a permanent workforce.

Global Reach: Many outsourcing firms have a global presence, allowing businesses to tap into new markets and customer bases more easily.

7. Innovation and Technology Access

Latest Tools and Technologies: Outsourced partners often invest in the latest tools and technologies, providing businesses with access to advanced solutions without the need for significant investment.

Continuous Improvement: External providers typically focus on continuous improvement and innovation, which can benefit the outsourcing business.

8. Increased Efficiency

Streamlined Processes: Outsourcing can lead to more efficient processes, as specialized firms often have optimized workflows and systems in place.

9. Focus on Performance Metrics: 

KPI Metrics based: Outsourced teams are usually driven by performance metrics and KPIs, leading to better accountability and results. Focus on the Business outcomes you need to drive expansion and growth of the business, setting critical KPI’s in place is very relevant whether you move forward with an in-house or outsourced model. 

How can TechCardinal Help?

Outsourcing functional areas like demand generation and sales as well as other technology functions can offer significant advantages in cost, expertise, focus, speed, flexibility, and overall efficiency, making it an attractive option for many businesses. Accessing and seeking inputs as to whether outsourcing vs. in-house makes sense is an important growth step for your business and an area that TechCardinal has done for many businesses.

Jeff Heselton 

TechCardinal Consulting Managing Principal / Partner