Outsourced or In-House?
Which Strategy is the right Strategy?
A common debate yet natural one for businesses of all sizes - here we discuss the what's, where's and why's . . .
This subject as it is a common question that passes the mind of most marketers, brand teams, business owners and likewise other agencies themselves – it’s a relevant topic of conversation, right now, in today’s volatile market where recruitment market is a challenging and time consuming task. There is scope to use this thinking across almost all areas of the business – whether its marketing, design, brand teams, HR, finance, sales or other areas of the business operation. For the purposes of this article, we’re going to focus on brand and design teams.
Over the last couple of years, the Covid-effect has really fast-tracked changes across the market far and wide. A few years back if you were recruiting for your team you’d look locally, certainly within an area of your office so they can be present at a desk. During Covid this was tipped on its head; you could now look anywhere as everyone was at home – the talent pool opened up nationwide. The impact of this however was that there was a re-balancing of salaries as recruiters levelled the playing field. Recruiters would even pitch the concept of recruiting in Europe. During Covid times this worked, but as society got back to some normality, hybrid working emerged as the balanced middle ground. With rising travel costs, fuel costs as well as every other cost, people need to be given options – businesses need to make in-house teams attractive propositions to join, and now even higher salaries for them to stay. Is this a sustainable proposition? For many, no. Only those with deep pockets can ride this out.
An in-house team can be tricky to start, grow and maintain. Outsourcing takes away the headache. In fact you leave all of those head-aches to the outsourced team to worry about. You can focus on your business. No politics, infrastructure costs, ongoing training and continuous management, saving on your bottom line monthly costs – sounds good, right?
It may sound as though I’m being biased, owning an agency myself, but I’ve just exited a business where we outsourced to a team in Europe, and then transitioned to in-house; all part of the evolution of the business and its needs. So my views extend from that of experience. I actually began my career in-house, before starting my first agency, and then growing a SaaS business, a much larger organisation than even my own agency.
There are times in the business lifecycle where there is merit for either as well as both!
So when is the right time and what are the benefits? Conversely what are the downfalls?
If you’re starting out, then you want to manage costs tightly. Outsourcing is perfect at this phase, as long as you pick the right Agency (link to other blog), then you can keep everything transparent, making sure you keep project briefs tight and direct. Finding a partner that can solve both short- and long-term situations is the ideal – similar to our own working collaboration with Bremont.
When is the right time to build in-house?
Unfortunately, there is no single right answer here, but as a business owner or team manager, intuition will tell you when it is right. A lot depends on the skillsets that are already baked into the business, therefore determining what other skills are required. Volume of work is another contributing factor as to when you should bring a team in-house.
We typically see the business lifecycle engagement trend looking like this –
‘X’ marks the spot?
Above we see a couple of different business evolution models. X denoting outsourcing and Y in-Housing
The blue shows a traditional activity line. The initial start requires huge efforts to bring the brand together, but we see at the first Y, that this is a potential opportunity to hand over to an in-house team. The day to day expansion and rollout phase can be managed but eventually leads to a stall. At this point brand typically need re-invigorating, re-aliging and even re-positioning, ready to go again.
The purple line is typical when a product is involved. There will be huge efforts into the development of the product, manufacturing, development, testing and so focus can be on the experience before the brand.
The orange line represents a business with continued sustained growth. Here the in-house with the right skill set bridges the trough, facilitating the consolidation of the brand, building value, before reaching the secondary growth phase.
Let’s look at the trend. Outsourcing can play an important role in many stages of a business’s journey. From initial start-up to first growth you can tap into resource as and when you need it. When you do start to grow, the day-to-day volume starts to grow; whether it be proposals, pitches, presentations or general marketing support, there will be a need for some form of creative design resource – this is when it can work. If you’re a SaaS business and have a product team, then your roadmap may be too stacked to take on other design functions as well.
Similarly, if you have an in-house design team, then they may not have the right skillset to take the job on.
In-house resource comes into its own if you have long term programmes to run or if the creative framework has been delivered, which can now move onto rollout and consolidation. It is often more cost-effective at this stage to bring the brand in-house for roll-out – the strategic phases close and the executional stages take over.
So to conclude this debate on outsourced vs. in-house: both work, both can be effective, both can deliver results that the business needs; it does however boil down to where you are in your business lifecycle, what skills you have already embedded into your team and what skills, disciplines, strengths you identify you need to bring in, in order to solve your design challenge.
At Digital Creative, we understand the lifecycle and have experienced the different stages first hand.
We can help you identify the skillset you need to plug and we can be an agile partner to expand and contract as you move through your own business evolution.
If you need Branding expertise or need to transform your User Experiences, then we want to hear from you!
Get in touch or call +44 1491 913 873. Let’s get this conversation started!
