Originally Posted by
True Blue
I often wonder at what point does the cost of out-sourcing become greater than doing it yourself, in terms of poor service and all the other issues that arise?
Outsourcing isn't always about reducing cost, though that often follows. Its great advantage is that it moves 'human assets' from the capital expenditure of the balance sheet to operational expenditure. In other words from fixed costs to variable costs. Which means the risk also shifts, to the contractor.
Which is why it's really hard to revert outsourcing, I've been involved in that process for more than a decade in IT and even if we can show that costs will be
lower by bringing back in-house there's still the problem of assuming risk of employing all those people again.