The question of whether to outsource or produce in-house?

When considering whether to outsource follow these simple steps in making your decision:

1. determine the production costs (or service costs)your company can avoid if it outsources the service or goods production

2. compare the avoidable (relevant) production costs with the costs of buying the product or service costs and select the lower cost option.

Remember, cost reductions achieved through outsourcing are little benefit if they are acquired at the expense of low morale and reduced productivity.