Whether an organization outsources or chooses to remain in-house, it is a sourcing decision to have the right work sourced and serviced in the best way for the company. Many organizations have in-house accounts payable and payroll operations and have never evaluated how their performance and cost compares with an outsourcer. The assumption is sometimes made that it is easier to continue doing the same thing with an internal department and that there is more control over performance and cost issues internally. This assumption creates a false sense of security with the in-house department operating as a monopoly.
Internal departments are incumbents with huge advantages.
The outsourcer is viewed as an outsider and not given access to the same management and information to compete effectively. If the process isn't open and fair, the outsourcer doesn't have access to all the facts or people to address concerns and questions, discuss options, or understand the company's full set of objectives. Essentially, they are easily outsold. More often, it is very difficult to get a true picture of all costs, headcount, and actual performance metrics in the in-house department for fair comparisons with outsourcing alternatives. Essentially, the business case to outsource fails for lack of true financial analysis due diligence.