Insourcing vs. Outsourcing

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Are you looking for new ways to lean out your business costs? Have you thought about outsourcing some of your current work functions. Below we have listed some of the pros and cons of insourcing and outsourcing to help you make the best decision for your business. 

September 23, 2019

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What is Insourcing?

Insourcing is assigning a project to a person or department which the company instead of hiring an outside person or company to do the work.

Pros of Insourcing

  • Work closely with team members
  • Control the quality of work
  • Enhanced synergy between departments
  • It shows investment in the workforce, which is good for morale

Cons of Insourcing

  • It requires more money and resources than outsourcing
  • Rebuilding a team can be expensive and time-consuming

What is outsourcing?

Outsourcing is the business practice of hiring a party outside a company to perform services and create goods that traditionally were performed in-house by the company’s own employees and staff. 

Pros of Outsourcing

  • Access to talent around the globe
  • Focus on your core business
  • Projects can be performed at a discount
  • Adds excellent expertise without a long-term commitment

Cons of Insourcing

  • Lack of control over the quality of work
  • Can get expensive if you need to fix work to meet standards
  • Disconnect between departments
  • Missing relationships with team members
  • Work is completed by others with no knowledge of your business culture

Which is best for your business

Outsourcing is a definite winner when businesses are focusing on cutting costs while having top talent on your payroll. It was once considered a luxury that only bigger companies could afford.  Today, businesses of all sizes use outsourcing to let go of managing nonessential roles; saving a lot of money in the process. 

The digital age makes finding outsourcing less of a nuisance than it once was before.  It is still very important to remember to asses all potential vendors before signing any contracts.  Taking the time to do a little more research on potential outsourcing partners can lead to long term gains and help you build a long-term competitive advantage for your business regardless of size. 

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Insourcing is a great option if you want the ability to have more control of the said process. Insourcing allows you to train and develop your staff the way you want which will give your employees a great sense of ownership.  

When your business is stuck on the which way to go, it is important to asses all the options available to you and pick the best one for your business objective. While insourcing can allow you to have more control and customize, outsourcing can be more scalable and cost-effective.

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