Project Management: In-House, Outsource, or Partner With a PM Firm?

Let’s take a look at which solution makes more sense for your business needs

As a small manufacturer, fabricator, or industrial distributor, you require project management and engineering services, but today you have many options. Before you take any action, please read further to determine which solution may be smarter for your business:

OPTION 1: Build an In-house Team

First, let’s look at the advantages and disadvantages of hiring people in-house for Project Engineering.

Traditionally, firms preferred to hire in-house for the following benefits:

• Full-time dedication to your Project
• Loyalty to the Company
• Control Over their Work
• Feelings That People Are Easier to Manage In-House

But times have changed. Globalization combined with Technology has enabled companies to hire people who work from anywhere. More recently, COVID-19 has taken it one step further and led to many firms loosening their previously strict work-from-home policies or deciding to create hybrid teams, or even go fully remote. Firms have figured out how to manage people remotely and stay productive.

Today, an in-house team must be first viewed from the following expense perspective:

• Job Ads and Recruiting Fees
• Salary Expenses (cost of a full-time Project Engineer is 100k and creeping up)
• Benefit Expenses
• Real Estate Costs (number of square footage per employee)
• Onboarding Investment (the need to invest in new employees to train them in company processes)
• Equipment Expenses (hardware and software)
• Management Expenses (having a dedicated manager who will need to oversee the work)
• HR Expenses (having an HR person dedicate time to the team member)

When you add up the total expense of an in-house team, it sometimes doesn’t make financial sense to go that route. Either you would need to increase greatly your project billings, which could negatively impact your competitive advantage on bids, or take personal profits cut to weather the cost yourself.

Conclusion: This is clearly the most expensive option and is best for a larger firm that has consistent, high monthly billings, solid financial stability, and is looking to grow the company larger to provide “full” services.

OPTION 2: Off-Shore Outsourcing

The offshore options have exploded in recent years and within a couple of minutes, you can hire a contractor thousands of miles from home for your next project. The main advantage of outsourcing is cost. Often, for a fraction of your in-house expense, you can find a qualified expert. The problems, however, often outweigh the cost savings. Some issues with modern outsourcing are:

• Time zone changes make it more difficult to communicate
• Language and cultural barriers may be present
• Work ethic is not always synced when you work with international partners
• Sometimes reliability is an issue and some nightmare stories have occurred where teams disappear, with your payments and without delivering all the files they should
• Offshore contracting often require double the back-and-forths as alternative options (in-house or local partner firm)
• Offshore teams may not be familiar with important local standards, regulations, or protocols, and this could impact the project negatively
• There are trust concerns since if there are any confidentiality breaches or other serious issues, it is impossible to pursue any legal means against an offshore company. Also, business liability will not open any claims against a Non-U.S. firm.

Conclusion: This is clearly going to be the cheapest option, so it is tempting for small to midsize firms to use this solution, but be warned: outsourcing has many drawbacks and sometimes major risks. It is only advisable if you get lucky enough to find a very reliable partner who has a U.S.-registered business with an offshore team. Better to be safe than sorry.

OPTION 3: Pick a Reputable Local Engineering Firm Partner

There are plenty of qualified project management engineering consulting firms you can choose from.

A few compelling reasons to consider this solution are:

Competitive Costs

If cost is a concern, this option may delight you since local engineering firms offer competitive rates. Reach out to us here for a free quote on your next project.

Communication

Dealing with a firm in your own time zone (or maximum an hour or two off) means excellent access to them as if they were with you in the office. Nothing is lost in translation and with today’s chatting, video conferencing, and online tools, it has become easy to work with people in different locations.

Reliability

Hiring another U.S. incorporated firm means you have a good measure of security if, in the worst-case scenario, any problems arise, to deal with them legally as well as file a claim for any losses on your business liability insurance.

Excellence

Engineering consulting firms can’t compete unless they are extremely efficient, accurate, and professional. After all, they are entirely reliant on reputation, referrals, reviews, and word-of-mouth. This means you can expect to have a well-defined project system that is proven to run smoothly, a point of contact who is a pleasure to work with, and an overall great experience that leads to satisfied customers who keep coming back and who leave glowing recommendations.

Speed

Hiring a local partner gives you the advantage of speed since you are working with them in real-time and don’t need to wait for any time zone delays. A good engineering consulting firm is designed to deliver fast, high-quality work.

Minimal Management

Unlike the first two options, when you choose an engineering consulting firm, you are dealing with senior professionals who need very little hands-on supervision or guidance. There is no need to have a dedicated manager overseeing their daily work nor any HR people catering to their needs either.

Cutting Edge Innovation & Technology

Project engineering firms must stay competitive and one way they do so is by investing in regular training, software, and certifications….all on their own cost, not yours. When you hire the right partner, you can expect to up level all your processes in the process as an added project bonus.

Conclusion: This option is ideal for a small-to-medium-sized fabricator or manufacturer who wants an affordable, reliable project management and engineering services solution.

How can we help you with your next project? Reach out here to discuss with us.

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Claudio Gutierrez is the President of Valens Project Consulting, premium project management and engineering services made in Houston serving Texas and beyond. To learn more, visit our website at https://valensprojectconsulting.com/