The difference between outsourcing & insourcing

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When it comes to choosing between outsourcing and insourcing, a number of companies cannot decide what is best for them. If you are also not sure, what is best for your business then this article is for you.

When it comes to outsourcing and insourcing, there are four major factors to consider:

  1. Cost
    A significant difference between outsourcing and insourcing is the cost to the company. Insourcing is generally more expensive to a company because new work processes must be developed to start the new division of the company. Outsourcing uses an outside company that already has a workflow developed and employees familiar with the process. 
  2. Expertise
  3. Flexibility and
  4. Business needs

    The pros and cons

    It is the practice of bringing in specialists to fill in temporary positions or simply training in-house personnel to perform tasks that could have been outsourced. Insourcing seems to be more prevalent with project-oriented companies that hire contractors /temps to provide a service.

    The hire is made through an external organization in order to cut costs and decrease the tax burden. Insourcing can also mean an organization building a new business centre or facility which would specialize in a particular service or product.
    Companies who insource can enjoy:
  • Total control of delivery and resources on-site
  • SLA and outcome based agreements
  • Cost saving and tax reduction
  • Change management made easier through skills transfer

    Outsourcing allows a business to focus on its core competencies while offloading its non-core functions to outsourcing providers in low-cost markets. You hire an outside service provider, consultant, freelancer service, or an agency to manage that portion of your business.

    It was once considered a luxury only larger companies could afford. Today, companies of all sizes use outsourcing to let go of managing non-core functions while saving a lot of money in the process. Companies who outsource have:
  • No control over delivery and resources
  • No control over project milestone
  • Additional cost for training
  • Guaranteed work continuation and no time down
  • No ownership of Intellectual Property

    How Communicate Recruitment can help you:
    We are able to consult from the needs analysis stage through a project based outcome approach, Communicate has subject matter experts on hand waiting to help you in your ICT transformation journey. We save you money and provide a dedicated team that gives you total control over service delivery. Click here to learn more.