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Bringing an Outsourced Service In-House

(April 2009) posted on Tue Apr 14, 2009

Many variables to consider.

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By Marty McGhie

When considering the various products and services we can offer our customers, most, if not all, of us utilize some outside help in the form of specialized vendors or subcontractors. One of the more difficult challenges in business is deciding when to stop spending your money on an outside service and move the work in-house.

When facing this decision, most companies make the mistake of just looking at the cost of what they are currently paying and comparing it to the anticipated cost of providing that product or service themselves. Cost is certainly the primary consideration, but because there are so many other factors to consider, making a decision without considering all the ramifications is risky and can lead to a poor decision. Over the past year and a half, our company has undergone this process with regards to our installation services. It may be worthwhile to share some of the key factors that we considered before moving away from subcontractors and setting up our own installation division.

Consider your manpower

One important factor is personnel. Before you take on a new service or product line, ask yourself if you actually have the people to pull it off. It may seem like a simple problem to resolve, but having qualified personnel to build a new line of business can be challenging. In the case of our installation department, we had to make sure our team was trained in multiple areas, including vehicle wraps, point-of-purchase displays, wall murals, fixtures, exterior signage, pole banners, window displays, and others. Getting a team fully trained in these areas is very difficult and requires extensive field experience to really get the hang of it. We were fortunate enough to have a couple of men who had done some installation at prior companies and had some of those skills.