—Dani Rodrik, Professor of Economics, Harvard
The correct answer to almost any question in economics is: It depends.
Whatever one might think about outsourcing web development—bottom line—it’s an economic consideration. It relates to the ROI of leveraging staffers properly in the marketing agency business. Specifically, it’s about optimizing annualized gross income. Or, when subtracting hard costs from revenue, making those hard costs smaller.
So when it comes to web-dev, is outsourcing simply a handoff?
But if that is too milquetoast of a conclusion, and you’d really like a “yes” or a “no”, then here are what those more conclusive answers look like.
No (It’s Not Just Throwing It Over the Wall)
Outsourcing is about serving clients and opening up new revenue streams. It’s different than just adding freelancers to get by.
In fact, one example of an environment where outsourcing matches up well is when there is already some expertise on staff.
To complement that, the outsource partner is one who can accurately define (and explain) the scope of work… someone who can ask the right questions and set the direction… who knows how to not underdeliver nor overdeliver on the scope… and serves as a subject matter expert. Helping to maximize revenue with a full slate of development services and know-how. And that translates to money not being left on the table because an agency doesn’t have the in-house bandwidth to pick it up.
When the project gets into the weeds, no one at the agency has to fumble and learn their way along.
Quality does not have to suffer.
Best of all? It comes as a transparent, pass-along, variable cost. Not a fixed expense.
Ultimately, the outsource partner helps the agency unicorns scale, doing what they do best, well beyond what they could do alone, increasing the ROI the agency already has invested in them.
In addition, agency identity doesn’t have to suffer either.
In fact, more than 80 percent of agency respondents in the international 2022 Agency Audit survey report that they have engaged partners to work beyond their own scope or capacity. And more than three-quarters said they white-label outsourced partners under their own brand, underscoring the transparency of the relationship.
Yes (Outsourcing is Just Throwing It Over the Wall)
Some may think outsourcing is as simple as a handoff. In fact, it’s a partnership. With the trust and communication only a soulmate can deliver and keep providing over time.
In that sense, when the seamless nature of the relationship becomes second nature, what a beautiful thing to just hand off web-dev to the in-house unicorn (and partner) without adding any further hard costs. Someone in-house who can take the ball and run with it, scaling up and out to expand revenue streams.
A Closing Note About Chucking Stuff Over the Wall
During this era of the Great Resignation, talent is short and capabilities suffer. It’s more likely that agency owners are pounding their heads against the wall versus lobbing work over it (flawlessly, anyway).
The Agency Audit Survey reported that a shortage of talent was the #1 overall challenge for agencies. And hand-in-hand with that dilemma, most who have not engaged partners have now considered it.
For a small agency with little or no in-house web-dev, outsourcing is an obvious fit. For the unicorn scenario where there already exists some in-house capability, it’s about making that person’s expertise scalable. For the full-service DevOps agency, outsourcing is about peppering in consultative resources combined with subject matter specialists, or even doing some ad hoc work.
So, what’s an accurate perception about outsourcing?
Well, it depends. It depends on how owners leverage it as they optimize AGI.