Deciding whether to employ in-house teams or use outsourced professionals and equipment is a tough call for companies of all sizes, and not just when it comes to the 3D vertical. And yet, it’s a dilemma we encounter more often when discussing innovative technologies on the rise such as 3D. Having worked with hundreds of companies, we know that even the biggest, most sophisticated brands in the world can make the wrong call when choosing between in-house and outsourced solutions. To help you make a more informed and educated decision, here are a few factors to consider.
Pros and cons
As with everything else in life, each option has its own advantages and disadvantages. Outsourcing means that not all resources are available to you anytime you wish to use them, and teams can be harder to manage on a regular basis. It’s also challenging to find the right people and companies to work with, particularly when agency personnel changed relatively often. On the other hand, building an in-house team requires companies to hire and manage professionals, which is not always easy considering the growing talent gap in the immersive technologies industry. In the UK, for instance, companies define the lack of skilled employees as one of the biggest growth barriers in AR, VR and 3D.
What to consider
In order to make a wise choice, companies should factor in the following elements:
1. Content production efforts
Some products are more complicated to capture and transform to 3D. Creating a 3D asset of a car, for instance, will take far longer than glasses. The combination of complexity and volume of products will determine the size of the team needed for the task and the overall cost of production. We have to take into account employees’ salaries, photography and storage equipment, software licenses, and more. With large volumes of complex products, a larger team of more than ten people may be required, and the cost and complexity of building an in-house team will be bigger as it will become harder and more expensive to source talents in most regions. This is especially true when considering that most company's 2D photography teams are still needed, as 3D images are added to the ongoing content production. We should also consider the high cost of AR/VR developers, who are in high demand and enjoy salaries that range from $135,000 to $150,000 in some areas.
2. Product volume vs. LTV
Companies should consider in-house work when they do not have a massive volume of products, and each product has a significant lifetime value (LTV). In this case, however, they should have a plan regarding employees’ work during times when the company’s 3D needs are slow.
For example, a company like Apple has a high LTV due to a low number of Stock Keeping Units (SKU) that remain in stock for a long period of time. A fashion company like ASOS, on the other hand, adds approximately 5,000 new SKU’s on a weekly basis to its digital catalog and has plenty of different items that change rapidly, with each one offering a low LTV per SKU.
Under such circumstances, Apple should consider building an in-house 3D team, while ASOS would probably be advised otherwise, even when considering that fashion products are expected to generate a higher sales uplift compared to other categories when using 3D/AR.
3. Gross Margin
When each product contributes greatly to a company’s ROI, as with luxury brands or expensive purchases, building an in-house team makes more sense. That is because updating the catalog immediately can truly benefit the business. We should also consider the fact that products with a higher gross margin often have a lower Inventory depth
4. Monthly visitors per product page
If a product page receives a great deal of traffic, it increases the potential for purchase significantly. For companies with a lot of website traffic and online sales as an established business focal point, building teams may be worth the investment. If the business still needs to figure out its online funnels, using outsourced teams makes more sense.
Complexity * new SKU’s per month * gross margin * monthly visitors * category value * inventory depth * inventory lifetime = Net value
If: net value =/> in house team cost, then: less in-house work and more outsourcing is needed
For many companies, a great solution to this dilemma involves not only analyzing the different factors listed here, but also expanding their access to 3D talent by collaborating with different partners in the field. We invite you to learn more about our pool of over 10K 3D engineers and enjoy the best of both worlds.
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