Make vs. Buy vs. Offshore vs. AI
Compare hiring in-house, outsourcing, offshore talent, and AI automation for one function, all-in.
Example scenario—not a forecast or verified benchmark. Enable JavaScript to edit inputs, view charts, save locally and export your analysis.
Example inputs
- Function
- Bookkeeping & AR
- Hours of work per month
- 320
- Manager's loaded hourly cost
- 75
- Comparison horizon
- 3
- In-house: loaded hourly cost
- 42
- In-house: recruiting & onboarding cost (one-time)
- 9,000
- US outsourcing firm: hourly rate
- 70
- Offshore / nearshore: all-in hourly rate
- 14
- Offshore: placement & onboarding (one-time)
- 3,500
- Offshore: management time
- 20
- AI: share of the work it can handle
- 40
- AI: monthly tool & API cost
- 1,200
- AI: build & integration cost (one-time)
- 30,000
- AI: human review time on automated work
- 15
Example results
Offshore talent is the lowest-cost way to run Bookkeeping & AR: $375K over 3 years, $252K (40%) less than hiring in-house; AI + in-house is next at $547K.
- Lowest-cost option
- Offshore talent
- Savings vs. in-house over 3 yrs
- $252,444
- Hire in-house: 3-yr cost
- $627,912
- Outsource (US firm): 3-yr cost
- $903,280
- Offshore talent: 3-yr cost
- $375,468
- AI + in-house: 3-yr cost
- $546,658
- AI + offshore hybrid: total cost
- $379,143
What stands out
Offshore talent is cheapest at $9,280/month all-in
$29 per hour of work once ramped, vs. $49.50 in-house after management time. Over 3 years: $375K.
Management load: $4,800/mo offshore vs. $2,400/mo in-house
Cheaper labor needs more direction. At 20% oversight, offshore uses 64 manager hours a month.
AI build pays back in about 8.1 months vs. all in-house
Based on automating 40% of 320 monthly hours.
Next actions
- Pilot one offshore hire for Bookkeeping & AR for 90 days with a written SOP and weekly QA before moving the full workload.
- Document the process before handing it off; whichever option you pick, unclear work is where cost overruns and quality issues start.
- Re-check in 6 months: compare actual management hours and error rates against the 20% / 15% oversight assumptions.
Model assumptions & limitations
- Ramp-up: 3 months (in-house), 1 (US firm), 2 (offshore), 3 (AI) at 50% productivity. Rules of thumb.
- Management time: 10% of work hours for in-house staff and 5% for a US firm (fixed); offshore and AI oversight are your inputs.
- Risk contingency on recurring cost: 5% in-house and US firm (turnover, vendor change), 10% offshore (continuity, communication), 15% AI (accuracy, rework). Directional only.
- Rates are flat over the horizon; no wage inflation or volume growth.