Lately I’ve noticed an increase in the market trend of insourcing and outsourcing. What is the difference in value creation for your organisation? Which one will serve you best?

These are the questions companies need to ask themselves in the current cost-pressurised environment. Will it work best for you to insource, by bringing in a third party to work from within your company? Or will you be better off outsourcing, by transferring portions of work to outside suppliers, rather than completing it internally?

As an alternative to outsourcing, insourcing has been hailed as a means of better resource management and source of innovation. It’s often used to fill temporary workers for short-work stints. You get the benefits of bringing people into your work environment, they understand your culture, what makes your business tick, while still bringing in new or different knowledge, processes and ideas that your team may not have been exposed to before. Adding that extra set of eyes into your team may also uncover some hidden value in areas you didn’t expect.

 In contrast, outsourcing allows companies to offload non-core competencies to third-party professionals. Efficiently getting task done that may be a once off need, saving you time and money. Outsourcing does have the advantage of letting you get on with core business, keeping distractions to a minimum whilst knowing that you can rely on the team you have engaged to deliver.Given there is clear advantages and disadvantages to both, I see it as crucial that companies take a long, hard look at their business goals before deciding upon the best value-add option for them. What’s easier to implement? Which one will give your business a long-term competitive advantage? What best fits your time constraints?

As a small business we do both, we outsource certain functions that are non-routine or require specific technical or professional skills we don’t carry inhouse. This has saved us time and money. We also insource on a regular basis bringing in highly skilled professionals to join our community, support our team, share their knowledge and deliver tremendous value. Often our team has been richer from the experience as a result.

Written by Simon Cohn (Managing Director)