I am a freelancer writing a sales letter. I would like to find out
good information about the cost of outsourcing relative to the cost of
employee time: I want some objective economic data about when it makes
sense to outsource a task. A good answer will include specific and
highly credible info. (Because I am a marketing writer, information
about outsourcing marketing tasks would be best. However, this is not
necessary.) Comments about subjective experience w/r/t this topic also welcomed!

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Request for Question Clarification by easterangel-ga on 31 Mar 2005 17:31 PST

Hi fieldlily-ga!

Are you still interested in an answer or the comments provided below
will be enough?

I can provide you with different articles showing different viewpoints
on when is the right time to outsource.

Thanks!

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Clarification of Question by fieldlily-ga on 01 Apr 2005 12:51 PST

Hi Easterangel-ga,

That would be great. Thanks,

Audrey

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Request for Question Clarification by easterangel-ga on 01 Apr 2005 13:57 PST

Hi again!

After rereading your question, I would like to ask a few more
questions so that I can prepare a better answer.

a. Do you require a particular industry to focus on? Outsourcing in
one industry may have issues not found in another.

b. Can you give me a hypothetical example of a objective economic data
so I will have an idea what I should be looking for?

c. If letters "a" and "b" are not present would a list of articles
providing opinions on when to outsource be enough. These will consist
of articles on different industries.

Thanks!

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Clarification of Question by fieldlily-ga on 02 Apr 2005 09:36 PST

Hi Easterangel-ga,

Okay. :) I am a corporate writer serving the medical industry. I think
it's more important to get something specific to the benefits of
outsourcing content development, and less important to get something
specific to the medical/medical device/health care industry. But
getting both would be a real Cadillac of an answer. :) General info is
good too, but specific to a different field is not good, of course.

As far as data: I am trying to make my clients, some of whom are very
hardnosed about financial statements (and rightly so), feel
comfortable hiring me. So numbers are great. Also,
information/recommendations from credible sources are great. Dollars
saved, dollars earned, strategic ramifications. . . Does this answer
your question?

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Request for Question Clarification by easterangel-ga on 02 Apr 2005 09:55 PST

I still haven't found any substantial info yet so at the moment I am
keeping this question open to other researchers. If ever I find
anything useful, I will post it here.

Thanks!

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Clarification of Question by fieldlily-ga on 03 Apr 2005 08:40 PDT

Okay, Easterangel-ga. Thanks for giving it a shot. Let me know if you
do find anything else. ~fieldlily.

Two times: One is hen the relative cost of an employee, with all
benefits, exceeds the cost of hiring out contract labor.

Example:

Employee, Salary 50K, Taxes 4.5K, 401K matching 1.5K, Insurance 6K. Total: 62K
(exluded are increases of 3-5% yearly on salary)

Contractor: 58K someone else handles payroll, taxes, insurance, 401K, etc.

Now its only a 4K savings, but what if you have 100 employees at this salary?

What if there are a thousand at this price?  What if you are a small
business at 4K is 8% of your gross profit?

Second instance: When it is to your competitive advantage.  

There is a maxim at stake: The responsibility of a
CEO/President/et.al. is to Increase Shareholders Wealth.  This is
business not charity.

Best of luck!

Clint

PS. I am not a Reasearcher, nor do I play one on TV, however, I have
advocated ousourcing jobs (even my own) because it made fiscal sense!

Fieldlily --

Some companies make a strategic commitment to outsourcing, not simply
due to cost considerations but the fact that they can use capital more
efficiently in the core business.  You might consider a Google search
strategy of:
Microsoft + outsourcing

Microsoft has outsourced non-critical jobs, such as the reception
staff that greets you in Redmond or research staff that does marketing
projects.  So many programming jobs are outsourced that the company
has as many "temporary" or "contract" employees as it does full-time
employees in the Seattle area.  At one point several years ago,
Microsoft decided to sell its software printing & production facility
to Kao, realizing that it could better deploy capital in the software
business and that printing & distribution didn't return the same
profitability.

A close examination of Microsoft is very interesting for other
reasons: initially it resisted investing in real estate for the same
strategic reasons.  But that was overridden by the strategy of keeping
its teams in close contact -- and when you have thousands of
programmers it necessitates a campus environment.  And there are some
other interesting examples showing how outsourcing has limits . . .

Best regards,

Omnivorous-GA

To both of you, thank you very much--I appreciate your insights!

I've followed up on both of your comments and just want to
reiterate--they provided *extremely* helpful direction. Thanks again.