The Business Case for Outsourcing
Professional Services


Organizations large and small can often make a strong case for the temporary use of outside resources. The most obvious situation is cost avoidance. You contract with a temporary services firm by the job - so they do not go on your payroll and overhead.

But there are other potential benefits, as well. Outside services firms make available talent to support needs outside an organization's core business functions.

Even very large companies seldom can afford to staff for peak demands or unique, one-time needs. In fact, as a matter of policy many will not add full-time staff when an identified requirement cannot be firmly projected to continue for long time frames. In such situations, use of professional services firms is the rule rather than the exception.

Professional services firms offer specialized knowledge and skills which can be drawn upon only when needed. Businesses large and small have periodic demand for the services of such professionals as:

  • Advertising agencies

  • Graphic artists

  • Classroom instructors

  • Printers

  • Course designers

  • Technical writers

  • Audiovisual producers

  • Translators

To help make a wise decision of what to keep in-house and what to outsource, it helps to think about your organization's core business functions. People and positions critical to the success of the organization's core business areas should be retained. Services which are peripheral to the core business can usually be outsourced with safety.

Benefits of Outsourcing

The benefits can be significant. Most organizations that practice outsourcing find that cost-containment is the key benefit. Other benefits often cited include:

  • The ability to draw upon specialized skills, expertise, and experience that do not reside in-house

  • The opportunity to staff for average, rather than peak loads, resulting in savings in payroll and overhead

  • The ability to address temporary requirements when spurts in service demand occur

  • New ideas and viewpoints – things any organization should welcome

Expense vs Investment

Too often, organizations view the use of outside services firms as a business expense when, in fact, the use of temporary talent can often prove to be a wise investment. Each situation must be viewed on a case-by-case basis, of course. When considering the alternative of adding staff or going outside, you need to consider all the costs and potential savings.

Be sure to include in your comparison your prorated internal costs for:

  • Annual salary

  • Perquisites, bonuses, benefit plans, and other burden items

  • Office or work space

  • Equipment (PCs, terminals, phones, furniture)

  • Ancillary support (secretarial, word processing, copying)

  • Length of need for services and the certainty of long-term need.

Testing Your Need for Outside Services

To test whether you have a viable business need for outside help, try this checklist. The checklist items have been ordered from greatest to least potential cost savings. However, the last item alone might provide adequate justification.

Our direct labor and burden costs to do this job ourselves would be higher than if we went outside.
We frequently need professional services, but can't afford to add full-time staff or facilities at this point.
We need specialized talent or expertise, but only on a temporary basis.
We are behind schedule on a project, even though our in-house staff is already working at capacity.
We have a new or "crash project," and no free staff to address it.
We could benefit from new ideas and fresh viewpoints.



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