In-House vs. Outsourcing to an Agency: 11 Vital Questions To Help You Make the Right Decision

Deciding between handling a project in-house or outsourcing it can be a pivotal moment for any business. It’s not just about crunching numbers—it’s about aligning with your company’s core strengths, managing resources effectively, and ensuring sustainable growth. In this episode of the Inspired Insider Podcast, Dr. Jeremy Weisz and John Corcoran delve into the key factors that shape this critical decision. From cost comparisons and opportunity costs to the strategic importance of tasks and their impact on internal teams, this conversation is packed with actionable insights. If you’ve ever struggled with whether to delegate or tackle a project internally, this episode provides a roadmap to making the right call for long-term success.

Here’s a glimpse of what you’ll learn:

• [01:56] Dr. Jeremy Weisz lists key questions for deciding between in-house and outsourcing
• [05:07] Aligning projects with core competencies and avoiding underestimating expertise
• [07:23] How does the expected workload influence the decision to outsource or keep in-house?
• [09:41] Cost comparison of in-house vs. outsourcing, factoring in the opportunity cost of non-core tasks
• [13:01] When does the urgency of project completion dictate outsourcing over in-house efforts?
• [15:22] Internal resource allocation and impact of dividing team focus on overall performance
• [18:04] What is your comfort level with delegating tasks, and how does that influence project outcomes?
• [18:57] The potential pitfalls of in-house vs. outsourced project management
• [20:11] Strategic importance of the project and whether that justifies outsourcing for long-term goals
• [21:54] How outsourcing can help build relationships with external partners and their networks
• [22:24] Impact of client lifetime value on the decision to outsource
• [27:37] Dr. Weisz discusses the risk of team members leaving and disrupting project continuity

In this episode…

Many companies struggle to decide whether to handle a project in-house or outsource it to an agency. This challenge often involves balancing core competencies, budget constraints, and internal resources. What factors should influence your decision when leveraging external expertise to improve operational dynamics and competitiveness?

According to Dr. Jeremy Weisz, several steps exist to effectively navigate this dilemma. Begin by assessing whether the task aligns with your business’s core strengths; if it doesn’t, consider outsourcing for the necessary expertise. Next, evaluate the long-term costs, including any potential hidden opportunity costs. Finally, take a closer look at your internal resources and their ability to manage the task. Sometimes, outsourcing relieves internal strain and leads to better outcomes, especially when specialized skills are required.

Tune in to this episode of the Inspired Insider Podcast as John Corcoran interviews Dr. Jeremy Weisz, Co-founders of Rise25, about the decision-making process for outsourcing versus keeping projects in-house. They discuss key considerations such as cost comparison, the strategic importance of tasks, and how to leverage external agencies to build long-term relationships. Additionally, they touch on factors like client lifetime value, timeline management, and the impact on internal resources.

Resources mentioned in this episode:

• Rise25
• Dr. Jeremy Weisz on LinkedIn
• John Corcoran on LinkedIn

Quotable Moments:

• “Investing resources in a project is a big decision — it’s not just about time and money; it’s about future growth.”
• “Expertise is key; don’t underestimate the skill required for a project if it’s outside your wheelhouse.”
• “When assessing the volume of work, remember, what seems manageable at first can quickly become unsustainable.”
• “Cost comparison goes beyond the bottom line to include opportunity cost and impact on core business activities.”
• “Outsourcing can provide a fast track to success by leveraging external expertise and established relationships.”

Action Steps:

1. Identify your business’s core competencies about potential projects: This ensures projects are a natural extension of your existing skills and resources, leading to more efficient execution.
2. Evaluate the skill level and expertise required: Understanding the skill gap helps you make informed decisions about whether to train, hire, or outsource.
3. Conduct a cost-benefit analysis, including opportunity costs: This provides a holistic view of expenses, helping to avoid hidden costs that could affect profitability.
4. Plan projects with a clear timeline: Setting a realistic schedule prevents delays and maintains momentum, which is critical for business development.
5. Assess the strategic importance of tasks: Prioritizing projects by their potential to drive business goals ensures resources are allocated effectively.

Episode Transcript

John Corcoran 0:00 

Okay, today we’re talking about how should a company consider a decision whether to do a project in house or to outsource that project to a specialized agency? It’s a question that you have to answer for yourself, and we have 11 questions that you must ask before you take on this project. My guest today is my business partner, Dr Jeremy Weisz. I’ll tell you more about him in a second. So stay tuned.

Intro 0:25 

You are listening to Inspired Insider with your host. Dr Jeremy Weisz.

John Corcoran 0:43 

All right. Welcome everyone. John Corcoran here, I’m the host of this show, and you know, every week, if you’ve listened before, I got smart CEOs, founders and entrepreneurs from all kinds of companies. We’ve had Netflix, Ginkgos, YPO, EO Activation, Blizzard, LendingTree, Gusto, OpenTable, lots of great episodes. Check out the archives, and you can check out more of those. And of course, this episode brought to you by our company, Rise25 where help B2B businesses to get clients, referrals and strategic partnerships with done for you podcasts and content marketing. And you can learn more about what we do at rise25.com or email us at [email protected].

All right, I got my business partner, Dr Jeremy Weisz, here today, and we are going to be diving into the topic of, when should a company consider taking a project in-house versus outsourcing that project to a specialized agency? And we’re going to be talking about it in the context of what we do, which is helping B2B companies, to get clients, referrals and strategic partnerships with done for you, podcasts and content marketing. And so Jeremy, let’s just kick it off here. What are a couple of considerations? How do you want to frame this episode?

Jeremy Weisz 1:56 

Yeah, so we’ll go through some of the questions that we have found to come up with the right decision. And then we’ll go in a little detail, but I just do want to frame this whole conversation why this is important because for us or any company, when you’re thinking of investing resources, that means time and energy resources of yourself and your team, it means money. So this could be a big decision whether to do keep the project in-house or to outsource it to a specialized agency. So this is it comes up. I know John, I mean, for us as a company, and all the companies we talk to, this is going through their head, where they realize it, or whether we realize it or not, right? So here’s some of the questions, we’ll just go through some of the questions, and we’ll discuss them a little bit further, but we did a lot of research online from what other companies ask, what we ask. And so here’s some of the deciding questions that we think about.

One, what’s the core competency of our business? Is it related closely to our services, or is it outside our primary focus? Second question is, what’s the skill level and expertise required for that task? The third one is the expected volume of work of that project. The fourth is, what’s the cost comparison? And it’s not just cost, just the actual money cost, but there is opportunity cost as well. Five is what’s the timeline for the project. The six is what’s the impact on the internal resources? The seventh is what’s the level of control and customization required for it? Eight, what are the risks associated with each option? Nine is, what’s the strategic importance of the task? How’s it gonna affect the business and bring in an expert or not? And 10 is, what’s the potential for long term relationships? John, people often miss this one, someone I just talked to.

They didn’t, I don’t think realize, like, at least with us, how many relationships we bring to the table for them outside of just everything else. And I look at the same with partners and relationships too, and that’s a factor that we evaluate. And then 11 is, what’s your client lifetime value, right? And that factors in. Why don’t we start with one, what’s the core competency of our business?

John Corcoran 4:37 

I think that there’s different ways of defining that we were just talking about, like a chip maker, like an Intel, they can look at like, are we a tech company? Are we a chip maker? Are we a chip maker who makes a certain type of chip for a certain type of product? There’s different ways that companies can define that, companies sometimes that evolves and changes, what your core competency is, what it was five years ago might be completely different from what it is now.

Jeremy Weisz 5:07 

Yeah. I mean, so is the job closely related to your core competency? If it’s not, you’re gonna be, there’s a learning curve there. And the second is, do you want to focus on your expertise and company and your superpower, or split your time and attention. So when you think of the core competency, that’s really a key component to that, like we try and stick to our core competency when we’re bringing an outside vendor in, and that’s a major question we ask. Okay. Number two, the skill level and expertise required for the task, yeah, talk about that. And we’ve seen a bunch of mistakes.

John Corcoran 5:50 

Yeah. And you see this all the time, right? Sometimes you look at something from the outside and you think, like, Oh, we’ve got the expertise for this. And then you get into it and you realize there’s a lot more to it than would be involved. I’ll give you an example. I’ve been looking at replacing a HVAC system on our house, and getting into it, and, like, realizing, wow, this is really over my head. You start watching some YouTube videos, you think I could handle this myself. And then pretty soon, you realize…

Jeremy Weisz 6:20 

I would never think I could handle this changing a light bulb, I can.

John Corcoran 6:26 

Maybe I’m a little too over ambitious, but you go down the YouTube rabbit hole, and you’re like, oh, I could do this. But then you realize, oh, okay, this is actually quite specialized. There’s a lot of knowledge that’s required here.

Jeremy Weisz 6:39 

I mean, look at an agency perspective. Like, we know a lot of agencies, and there’s ones that only specialize, let’s say, in email marketing, right for ecommerce businesses. Ecommerce business, they could be like, you know what, I can send an email out. But when talking, we’ve run a lot of podcasts for agencies in the ecommerce business realm, and it’s like, oh, wait, do you have a, you know, abandoned cart sequence? Do you have this sequence? Do you have that sequence? There’s like, 11 different sequences that they’ve built out that can make them more money. So at first glance, like you said, it looks like I could send an email out through Klaviyo on Shopify or something, but it’s there’s a lot more that goes into it. So what is the skill and expertise?

John Corcoran 7:23 

So that’s one where it’s easy to underestimate the amount of skill and expertise that could be required. And the next one is, what’s the expected volume of the work? Which is another one where people oftentimes underestimate the amount of work that would be required. Specifically, if we’re talking about in the context of a podcast, it can be a lot of work, especially if you’re not used to doing this type of work on a regular basis, there’s context switching from doing the work that you normally do to switching to the other type of work. And frankly, my podcast for the first three or four years, that was the reason that I was very inconsistent with it was because I was trying to oversee that stuff myself. It was a lot more work than I expected, and not something that it should have been handling myself.

Jeremy Weisz 8:08 

I think we were even talking on the podcast realm, talking to someone who was doing it themselves, and they kind of said, leisurely, yeah, maybe we spend, like, I don’t know. The team spends 30 hours per episode. And you were like, wait, what are you talking about?

John Corcoran 8:24 

And it’s not sustainable. Like when I hear that, I say, look, you’re not going to be doing this six months from now. They think they are. They think, oh, be fine, but it’s just going to grind to a halt. You’re not going to keep on doing it if that’s the case. I had one person that told me once that they spent 100 hours of their own time on their very first episode. And guess what? They had exactly one episode that was live. It was a couple of years earlier. They’d gone live on this one episode, and then it was such a negative experience, they never put any more effort into coming up with an episode too.

Jeremy Weisz 8:55 

I’ll give those people credit for at least tracking it, because some people don’t even track it and don’t realize how much they are spending and how much their team is spending in there. But it goes into the volume of work. Is it a one-time project? Is a recurring need? And how does that volume affect your decision? Obviously, if, in our world, if you’re doing a podcast, you want to keep doing it, because it builds relationships and with partners, clients and everyone else.

John Corcoran 9:27 

So, next consideration is, what is the cost comparison? So the cost between doing it in-house versus the cost of outsourcing. And for this, Jeremy, what are a couple of thoughts on this one?

Jeremy Weisz 9:41 

Yeah, I mean, from a cost comparison, I always factor in opportunity costs, like even for ourselves, if we’re thinking of doing something and bringing another agency to help us, we have lots of agencies that help us. Same thing with companies we’re talking to. So there’s a big opportunity cost, right? And so I was talking to someone, actually, earlier today, and it’s like, quote, unquote, maybe they save a bit of money with their internal team doing it. But obviously some of those other things, like the expertise is not there. Like, obviously, we’re specialized in what we do. And if you’re talking to an agency, they’re specialized, so the expertise isn’t there. So not only is it, it’s somewhat comparable. It wasn’t like when I was talking to them.

It actually wasn’t that much more for us to just take everything off their team’s plate and deliver a higher quality service and focusing on the strategy and ROI, it seemed like a no brainer. And the cost comparison is also an opportunity cost, right, which is now you’re spending time on something else instead of serving your current clients. And again, goes back to the core competency. If this is not your core competency, then the cost is going to be higher in general, because your team’s going to spend more time and energy on something that should take a shorter amount of time regardless.

John Corcoran 11:12 

So even if that’s a quote, unquote fixed cost because it’s a full time employee, it’s costing you more because they’re spending more their time on that rather than they could be spending time on other things. Let’s move on to the next one, which is number five. What is the timeline for the project? Is this something that you don’t care when it gets done? Is it something you want to get done in q1 q2?

Jeremy Weisz 11:34 

You were talking to someone recently that said, oh, yeah, we’ll get it out. And then six months later.

John Corcoran 11:43 

Exactly, it happens all the time. And oftentimes the first question I ask people is like, how long have you been thinking about doing this thing? Right? And it’s oftentimes three years, four years, five years, they’ve been thinking about doing it. And the reason that it doesn’t come from fruition is simply because they leave it in that area, or they don’t bring in those outside expertise that can get it done so quickly. We were just talking to a team member who mentioned that they had their bathroom redone in four days. And I was like, four days, oh my gosh, that’s crazy. And a lot of times you might be thinking about something like that, but it could be done in four days. If you want something to be done quickly, it can get done quickly, but you have to bring in outside specialists in order to do that.

Jeremy Weisz 12:31 

In that particular case, you this person has a very high client lifetime value, like we’re talking millions of dollars, and they lost at least six months already, that they could have gotten a client, maybe two so that could mean millions of dollars for this business, just because they’ve been thinking about it and haven’t done anything, right? Yeah, absolutely. I mean, that’s why we’re talking about this question, right? And the criteria, yeah.

John Corcoran 13:01 

Yeah, yeah. You push it, pushing it off and that’s, that’s definitely a consideration. Number six, what is the impact on internal resources? Now, this is one that I really like, because I think a lot of times, owners, CEOs of businesses don’t realize the impact on their team, and it can lead to attrition, team members leaving. If they’re torn between different projects, a lot of times, they like working on the work that they were hired to do, and if they are forced to divert their resources, their tension between different projects, then that really can drain morale. It can cause them to feel like unfocused. There’s a lot of things that can have a big impact on those your biggest asset, which is your team.

Jeremy Weisz 13:52 

Yeah, and I feel like there’s kind of two scenarios here. One scenario is the team is just doing their work, and they have a normal workload, right? And you throw this on top of their normal workload and really affects their job, right? And we’re cognizant of that with our team, like, hey, can you do this? And it’s like, oh, it’s one more thing I have to do. And the other scenario we find is maybe they don’t have as much work right now, for the other team member, maybe has a lighter load right now, and we’ve seen it happen where, well, then all of a sudden it gets busy, right? And that project is no longer the priority, right?

John Corcoran 14:36 

And in the podcast context, when your podcast is your business development, it’s your networking, it’s your lead generation, it’s your SEO, it’s your content marketing, it’s when it’s serving all these different purposes. And then you get busy because you get to onboard some new clients, and then the team ever stopped doing it, and you look up and it’s been six months and you haven’t put out a podcast episode, and all of a sudden leads are not flowing in, and new clients are not coming around. Well, what happened? What happened was, is that it was an impact on internal resources that were split between different priorities, and so it got dropped by the wayside. And then that affects all those different things that we mentioned, that it affects your business development, it affects your pipeline, it affects your leads, all that kind of stuff. And so it has a big impact. That’s number six.

Jeremy Weisz 15:22 

Talk really quickly about the timeline piece, because the fast track, I think about this a lot like, Do you want a proven fast track and a proven plan and fast track things? Or do you prefer to learn to figure out yourself? For me, obviously, from a podcast perspective, we talked about that, that person could have had their podcast going, like, four months ago, right for me and my health journey? Like, can I get healthy and like, know enough to figure things out myself? Sometimes I’m just like, listen, I just need to hire someone who has the exact plan and just put me on it, and I’ll just get there a lot quicker with approval.

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