When deciding between in-house engineering teams and outsourcing, many decision-makers fall prey to several misconceptions.
Is in-house engineering really cheaper? Or are you overlooking hidden costs? Let’s debunk the myths around in-house vs. outsourced engineering to help you make smarter decisions.
Misconception #1: In-House Engineering is Always Cheaper
It’s easy to assume that in-house teams save money by avoiding external fees. However, the true cost of in-house engineers is often underestimated. Beyond salaries, you must account for benefits, taxes, office space, and equipment, which can make the effective cost of an in-house engineer significantly higher. In fact, studies show that the “fully loaded” cost of in-house engineers can be more than double their base salary.
Outsourcing, on the other hand, often offers a more flexible and cost-effective model. Firms can spread overhead across multiple clients, meaning you only pay for what you need. For example, one company found that outsourcing their engineering work saved them 60% in overhead costs, avoiding delays and inefficiencies caused by their overburdened in-house team.
Misconception #2: Outsourcing Puts Our Data and IP at Risk
Many companies fear outsourcing due to potential data security risks. However, reputable engineering firms understand the importance of protecting intellectual property and sensitive data. Many firms adhere to industry-leading data security certifications like ISO/IEC 27001, which provides robust safeguards for client information. Outsourcing partners are often better equipped to protect your data than in-house teams due to their advanced IT infrastructure and strict confidentiality agreements.
Misconception #3: Our In-House Team Knows Our Industry Best
While in-house teams bring valuable knowledge of your specific company, external engineering firms offer broader expertise gained from working with multiple clients. A specialised engineering firm may have tackled similar challenges across industries and geographies, bringing fresh insights and optimised solutions. For example, an outsourced firm might identify and solve bottlenecks in your warehouse automation system, increasing throughput by 15% with minimal cost changes.
Misconception #4: In-House Teams Are Faster and More Productive
Having an in-house team can feel like you’re getting immediate action, but outsourcing can often deliver quicker results. External engineering firms are set up for scalability and efficiency, allowing them to rapidly allocate resources as needed. This elasticity is especially beneficial for project-based work where demand fluctuates. Outsourcing can lead to faster turnaround times, as the firms are highly specialised in delivering projects on tight deadlines.
Leveraging Outsourced Engineering for Maximum Value
Outsourcing engineering in material handling isn’t an “all-or-nothing” choice. Many companies use a hybrid model, retaining an in-house team for strategic tasks while leveraging external experts for specialised projects. By debunking the myths around cost, data security, industry knowledge, and productivity, you can approach outsourcing with confidence.
Outsourced engineering can help you execute projects more efficiently, scale your operations, and access global expertise, all while controlling costs. When making this decision, remember to evaluate the total cost of ownership, vet your partners on security standards, and ensure the external team aligns with your goals.
Ready to Optimise Your Engineering Strategy?
EDC provides specialised material handling engineering solutions at a fraction of the cost of maintaining in-house departments. Email admin@edcc.co.za to learn more.
We’ll be publishing an in-depth e-book on this topic soon!