#13: Outsourcing versus sub-contracting
When is it outsourcing and when sub-contracting? Companies that rushed into outsourcing have belatedly discovered that there is a difference. Subcontracting is about efficiency ; outsourcing is about effectiveness.
You should subcontract when an outsider can provide a service more efficiently than you could do it in-house, which is why you can have more than one subcontractor providing the same service. Office cleaning is an example.
Outsourcing makes sense when you need access to necessary skills or expertise that you don’t have to own. What matters now is the relationship between the two of you, which is why you have only one outsource partner for a specific skilled service. Payroll administration is a good example.
However, it is pure nonsense to outsource or subcontract anything that involves contact with your customers.
I like to think that my clients outsource to me because I am good at this. But maybe they are simply exploiting me.
I’m james@nonsenseatwork.com
Copyright: 2006 James Henry McIntosh
You should subcontract when an outsider can provide a service more efficiently than you could do it in-house, which is why you can have more than one subcontractor providing the same service. Office cleaning is an example.
Outsourcing makes sense when you need access to necessary skills or expertise that you don’t have to own. What matters now is the relationship between the two of you, which is why you have only one outsource partner for a specific skilled service. Payroll administration is a good example.
However, it is pure nonsense to outsource or subcontract anything that involves contact with your customers.
I like to think that my clients outsource to me because I am good at this. But maybe they are simply exploiting me.
I’m james@nonsenseatwork.com
Copyright: 2006 James Henry McIntosh
posted by James Henry McIntosh at
7:20 AM
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