In general question asked by many organization is "should I outsource my work?"

When you’re outsourcing, you’re spreading your work out. It’s a way to grow your business without hiring staff. However, rather than outsourcing many organizations are now considering insourcing some of the critical tasks. As companies grow and their functions become complex, there emerges a need to use alternative methods depending on the business objectives.

Before we jump into Outsourcing vs Insourcing you need to know What is Outsourcing? & What is Insourcing?

What is Outsourcing?

Outsourcing is a method of dispersing certain work functions to an outside vendor/party instead of having it performed by an in-house employee or department. You can outsource a project to an employee or a company. It’s often, concluded to be the time and cost-saving tactic, where an organization can concentrate on vital functions of a project and outsource supporting functions to be carried out by outsourcing vendors. The size of the outsourcing market has amounted to 88.9 US billion dollars globally, which is double the amount it was in the last decade. These stats propel more organizations to incline towards outsourcing.

Outsourcing has been appreciated majorly, though it had some negative impacts on society as well, such as loss of local jobs and affect in the economies of the countries that outsource and independent outsourcing partner often called "Market Firm"

What is Insourcing?

Insourcing is a technique that is opposite to outsourcing. While insourcing, the organization hires staff to work internally. We can consider it as bringing a foreign employee at lower wages rather than assigning the work to an external agency.

Companies might decide to insource for several reasons, such as retaining control or they might want to retain control over need for specialized skills. For example, in order to maintain control, the company may decide to manufacture certain critical components and depend on insourcing.

Differences between Insourcing and Outsourcing

• Insourcing helps to track the development process and puts control over the quality of the work, while in the case of outsourcing, it becomes difficult to trace the quality of work.

• There is very minimal risk in insourcing, as one can have complete supervision over intellectual property (IP). In outsourcing, the entire task is in the hands of an outside third party. In case IP is leaked, it proves awful as investments on research, people and development work go in the vain and outside party claiming the idea as theirs.

• Insourcing helps in evading intermediaries’ costs like fees and commissions. Insourcing also drives to point other cost exponentials such as incorporating and utilizing third-party vendors who offer value-based pricing.

• In outsourcing, there are possibilities of miscommunication as the outsourcer and outsource vendor are in different places. The information goes from head management, and then, they commune it to outsource provider’s managers, who will lastly convey it to employees. This arduous and lengthy process has a risk of miscommunications. However, insourcing cancels out such possibilities. The miscommunication aspect is reduced in insourcing, as there is direct communication with employees.

• Outsourcing a project overseas might face a few issues due to the different time zone and cultural factors. A vendor might have varying physical outsources, various techniques, design, and engineering. There is a big chance of communication problem due to different time zone. In insourcing, the assigned team will easily decipher the requirements, design, and engineering to produce a product as per nativity.

• Various projects require complete confidentiality of data, which cannot be outsourced to a third party vendor. In that case, it is feasible to bring in their resources over to the project location, keeping the confidentiality intact while introducing expertise.

Conclusion

Insourcing is more preferrable when the business requirement is for a limited time or temporary or involves little investment. Outsourcing weighs more when businesses need to cut costs while still in need of expert professionals.