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Rethinking In-House Project Management: The Economic Advantage of Outsourcing

Most plants operate on a foundational belief that keeping projects in-house saves money. This conviction is rooted in the presumption that handling everything internally eliminates third-party mark-ups and outsourcing fees. However, is this conventional thinking entirely sound? Delving into the complexities of project management and completion, we find that the economic reality might not be as straightforward as it initially appears.

Time Is Money: The Hidden Costs of In-House Project Management

The foremost factor to consider here is time. It's an old adage that 'time is money,' and it's especially true in business. Delays in project implementation often lead to financial losses, not necessarily through direct expenditure, but via foregone earnings that could have been generated through faster implementation.

Consider a situation where an in-house project is delayed due to unforeseen complexities or the lack of necessary expertise. While it may seem that the project's budget remains the same, the company is potentially losing revenue for every day the project remains incomplete. The income that could have been generated from a completed project - or 'potential earnings' - is a significant economic factor that should not be overlooked.

Supercharging the Golden Goose: Outsourcing as a Strategic Decision

To better understand the concept, let's use the analogy of the goose that lays the golden eggs. Keeping the project in-house is like patiently waiting for the goose to lay its eggs. It's a slower process, but it may seem like the most cost-effective approach. But what if we could supercharge the goose?

Outsourcing is akin to this supercharging. By delegating the project to a company equipped with the necessary expertise and resources, the process is expedited, and the project is completed more efficiently and effectively. This accelerates the rate at which the 'golden eggs' - the profits from the completed project - are produced.

In other words, outsourcing may seem to involve an initial outlay, but it ultimately results in a higher return on investment. Outsourcing, therefore, can be a strategic economic decision, contradicting the initial perception that in-house management is invariably the most cost-effective.

Core Competencies and Resource Allocation

Another significant advantage of outsourcing is the focus it allows on the company's core competencies. Delegating the technical aspects of the project to experts enables the company to concentrate on what it does best. This reallocation of focus, time, and resources can be used to grow the business, increase revenue, and achieve long-term goals.

In essence, outsourcing provides a company the space to enhance and improve its central operations. Therefore, while keeping projects in-house may seem logical in the short term, outsourcing can offer more substantial economic benefits in the long run.


When examined from a holistic business perspective, the value is in having as many 'golden eggs' as possible, and having them as soon as possible. While in-house project management may eliminate outsourcing fees, it could also delay the generation of these golden eggs.

In contrast, outsourcing can expedite project completion, leading to faster earnings, better allocation of resources, and improved focus on core business operations. Consequently, companies must consider outsourcing not as an additional expense, but as a strategic decision aimed at enhancing overall business economics and efficiency.

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