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Most firms compare software licences against an outsourced fee and conclude outsourcing is expensive. That spreadsheet is missing its biggest line.
Firms weighing this usually build a spreadsheet with software licences on one side and an outsourced fee on the other, and the outsourced number looks bigger. That spreadsheet is missing the largest line on the in-house side, which is the time of whoever does the work — and at most firms that person is the principal.
The honest comparison has four columns, not two: software, staff time, risk carried, and what the principal would otherwise be doing with those hours.
| Line | Often counted | Usually not |
|---|---|---|
| Portfolio accounting and reporting | Licence | Reconciliation hours each month |
| Trading and rebalancing | Licence | Someone watching drift daily |
| Billing | Licence | The quarter-end run, and the errors it catches late |
| Compliance evidence | Consultant | Assembling the file when an exam arrives |
| Integration between all of it | Nothing | The person who becomes the translator |
Genuinely: when you have the staff, when your process is unusual enough that standardisation would cost you something real, or when control over configuration is worth more to you than the hours. Firms with a dedicated operations hire often run this well and should not be talked out of it.
Almost always at the same point — growth. The in-house model scales by adding people, and the first hire is the hardest one a small firm makes. If doubling your book means doubling your back office, you have a model that punishes the thing you are trying to do.
Outsourcing is not all or nothing. Plenty of firms keep planning and relationship work entirely in-house and move only the operational spine — trading, billing, reporting. That split preserves the parts of the job that are yours and removes the parts that are nobody's favourite.
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