I cannot do the job in house for the same price. Again, the outside contractor has mass, if they have turnover, they probably would experience a small blip in productivity, you could experience a meltdown. Your question is actualy the most basic consideration in outsourcing. If a company can't answer that question they better put the brakes on the outsourcing plans. This is what the outsourcing experts can do for you.
Most organizations actually have more than one core competency.
That's why I don't support the theory of focusing on a core competency and outsourcing the rest. Outsource only when a properly managed non-core function can and will be better provided by a third party at a reduced cost. While most people are now more familiar with some of the other potential benefits of outsourcing such as technology improvement, sharing of resources, and one-time skill sets, the benefits and measurement of focus on core competency is less familiar. The measurement of this focus has both tangible and intangible aspects. The tangible aspects of focus are far more compelling and readily measured.