Outsourcing Vs. Crowdsourcing: What’s The Difference?
Outsourcing and crowdsourcing are two words that frequently make the rounds on the internet and in the tech industry.
Both are different yet can be confused as the same.
Let’s find out what outsourcing and crowdsourcing are and why should it matter to you:
Outsourcing
Outsourcing is a business strategy or model adopted by companies as a cost-cutting measure. It is when a company hires out an entire department, job role or team to a third-party vendor or outsourcing company permanently and lets them lead the charge. More often than not, companies turn to outsourcing to cut down on costs, access a global talent pool and save up on time. The roles or departments that are hired out through outsourcing are for prolonged periods of time until they meet a set target or complete a set project.
Even outsourcing has different types depending on the mode of working. Let’s check out a few:
- Onshore outsourcing — The onshore outsourcing process involves a company delegating a branch or part of a business function to an external service provider that is also located in the same country.
- Offshore outsourcing: The offshore outsourcing process takes place when a firm delegates a part of its work to an external service provider that is located in a distant country.
- Nearshore outsourcing: The nearshore outsourcing process involves a firm delegating a part of their work or a business function to a third-party vendor that is located in a neighbouring country.
Crowdsourcing
Crowdsourcing is a form of outsourcing in the sense that it involves delegating tasks to masses and larger groups of people in general whom the company has never met. In layman’s terms, it is sort of an open call to bring new ideas, fresh perspectives and more diverse options to the table.
Crowdsourcing can also be mistaken for crowdfunding which is a means to gather funds when the beneficiary can’t raise them themselves. Crowdsourcing takes its true meaning from crowdfunding nevertheless in the sense that it outsources tasks from the public for free in order to support itself.
Conclusion:
Crowdsourcing though trendy isn’t a great way to get the job done. If your enterprise is running low on time and funds and doesn’t want to invest in building costly in-house teams, you can always turn to outsourcing and hire an agile software development team.
