With the world becoming more connected, competition across all industries is skyrocketing. To compete, businesses must re-evaluate their sourcing strategies. But with so many options, it’s tough to know where to start. Is it time to look beyond traditional sourcing models? Or is sticking to tried and tested methods the way to go? It’s Rightsourcing vs outsourcing.
Why Consider Rightsourcing vs Outsourcing?
Like most people, you probably built your business in a piecemeal fashion. Bit by bit, you put the pieces together until a business was recognizable. But the complexities of modern business means that a business is never done changing. Old pieces might need to be removed and new pieces added. As a business owner, you need to be open to shifting and adapting your business to stay competitive.
This is where your employee sourcing strategies come into play. If a strategy is going to be successful and pay dividends, it needs to align with your business needs and goals. So understanding the ins and outs of rightsourcing vs outsourcing is important.
Rightsourcing vs Outsourcing: What is Outsourcing?
All businesses reach a point where they need to do something new to improve or expand. Outsourcing helps businesses catalyse this process without needing to create in-house mechanisms. As market factors change, so does the way you need to outsource. For example, things like cost, talent availability, and organizational readiness will influence your outsourcing strategy.
Advantages to outsourcing to consider when weighing rightsourcing vs outsourcing are:
Outsourcing to specialist contractors means injecting expertise into your business. Expert outsourcers come armed with new network management tools and technical knowledge. This adds expertise to your business, bettering your purchasing leverage.
When comparing rightsourcing vs outsourcing, efficiency is a huge plus for outsourcing. Using experts means task completion is faster without compromising on quality output. And giving supporting processes to outsourcers leaves you to focus on other core business processes.
Using outsourcers outside of your business means you skip hiring new in-house employees. This eliminates recruitment and operational costs that come with new staff, like training. It’s also easier to scale back outsourced tasks when they’re no longer needed.
When you outsource components of your business, you shift some responsibilities to the outsourcer. This lessens risk, as the outsourcer can better plan for mitigating factors. Further, the lack of operational links between your business and the outsourcer means you can move on at will. If a better service opportunity arises, changing to a different outsourcer is simple. This simplicity sets outsourcing apart when evaluating rightsourcing vs outsourcing.
Outsourcing has its benefits, but it’s not flawless. So it might not win the battle between rightsourcing vs outsourcing. With outsourcing, keep in mind –
- No single provider is suitable for every business.
- An outsourcer’s abilities could do more harm than good if they aren’t appropriate for a specific project.
- The transactional-based approach of outsourcing might be incompatible with your business. Services needing mutual dependency or customized processes aren’t suitable for the transactional model.
Rightsourcing vs Outsourcing: What is Rightsourcing?
Let’s look at the other side of the rightsourcing vs outsourcing battle. Rightsourcing aims to find the optimal balance between in-house and outsourced resources.
You determine what service is needed and then you find the best resource available to deliver it. Rightsourcing looks different for different businesses. For some, rightsourcing might mean being 100 % in-house reliant. While for others, contracting third-party service providers is preferable.
Advantages to rightsourcing to consider when weighing rightsourcing vs outsourcing are:
Successful rightsourcing models usually include a concept called ‘co-sourcing’. Co-sourcing is an agreement where both in-house staff and outsourced experts work together.
Experts provide the lacking expertise and help handle peak work-loads. And staff manage the experts, overseeing and weighing in on their work. This fills the in-house skill gap but allows businesses to be involved in the process – it’s a win-win.
Co-sourcing is Not Traditional Outsourcing
It’s easy to get the two concepts mixed up but they’re not the same. If you outsource, you relinquish control over the product you are receiving. But co-sourcing gives you the same managerial control you’d have with regular staff.
Your in-house team will still be responsible for managing internal and external resources. Understanding this nuanced difference between rightsourcing vs outsourcing is essential.
Rightsourcing finds cost-effective staffing solutions without compromising on quality and performance standards. Hiring experts with the right talent resources costs less than hiring the same talent in-house. It’s a winning formula: better service + affordable price + quick time frame = perfect expert.
There’s More Variety
Using rightsourcing means tapping into a variety of resource avenues. More variety provides more opportunities for customization. You can also mix and match different resources to suit your business needs. This allows for applications to be tailored to your business processes.
It Leads to Better Networking
Global connectivity and modern technology mean you can access the best experts worldwide. Rightsourcing lets you build relationships with expert talent from different contexts. As a result, your networks will be more diverse, stable, and useful.
Better Communication Increases Productivity
Modern collaboration tools make it simple to bring external talent into your business. Having in-house managers manage experts creates more cohesion within your business. This cohesion improves communication between in-house staff and experts and fewer communication errors mean more time to market for your business services.
More Administrative Control
If the service you require is central to your business, you need to make sure it’s executed well. Rightsourcing allows you to maintain direct oversight and tight control of business services. This gives you administrative control while still providing convenience.
As we’ve already outlined, no strategy is without drawbacks. When looking at rightsourcing vs outsourcing, you should be mindful of the following:
- Rightsourcing requires careful thought and implementation. Time is needed to identify the right talent and position them in your business. For example, quality, cost, and risk reduction must be at the forefront of your consideration.
- Make sure to keep some core systems and skills in-house. Rightsourcing also includes maintaining and upskilling the talent within your business. Save external contracting for highly technical tasks or generic work and keep skills required for customization in-house.
- Remember to embrace change. Becoming ‘rightsourced’ requires implementing a coherent, long-term procurement strategy and finding effective managerial techniques for a rightsource environment will be needed.
Rightsourcing vs outsourcing: Weighing Up Your Options
Now that you know the ins and outs of rightsourcing vs outsourcing, how do you choose? Rightsourcing vs outsourcing has loads of pieces to choose from! Your exact business needs should be paramount when deciding between right sourcing vs outsourcing.
Here are five factors to think about when choosing between rightsourcing vs outsourcing:
Before you choose between rightsourcing vs outsourcing, pinpoint what services you need and then you can decide what resources you need to find. Start by evaluating the skills available in your business and the project’s longevity.
If the project is short-term or a one-off that won’t need constant revision, outsourcing is a great option. You request the services, they deliver, you pay – simple. If the project is ongoing or you’ll need to use the same expert skills again, rightsourcing makes more sense.
Rightsourcing is better for projects that involve customization or managerial control. Choosing outsourcing for brand differentiation tasks could decrease your competitive edge.
Choice in Expert
Expert choice is another important consideration when weighing up rightsourcing vs outsourcing. You must look for an expert who understands your business’s needs. For this, rightsourcing is a great option, as it allows for more operational control.
Rightsourcing lets your in-house staff manage cost, quality, and expediency. This makes sure that every element of the project delivers the most value to your business.
Cost and Risk
An obvious factor to consider when weighing rightsourcing vs outsourcing is cost. With outsourcing, there’s a risk of dissatisfaction with service delivery which could open you up to possible dispute costs. If money isn’t a concern, then this possibility won’t worry you.
But if money is a consideration, then rightsourcing will make more sense for you. It’s less risky and you’re more likely to receive the services that you want. Ask yourself, can you afford either option in rightsourcing vs outsourcing?
Choosing between rightsourcing vs outsourcing requires you to check your business processes. Which option fits in with the way your business runs and its operational capacity?
If the service only requires an hour of work a day, outsourcing saves your in-house staff time. While rightsourcing would be better for tasks that need more time and long-term services.
Depth of Service
You must also consider the extent to which you want expert knowledge to be used in your business. Rightsourcing experts can provide continual recommendations for new technologies and methodologies.
Consequently, they become strategic partners, useful for consultation, not just order-takers like outsourced experts.
Final Thoughts on Rightsourcing vs Outsourcing
Regardless of where you stand on rightsourcing vs outsourcing, staying competitive requires effort. You must use every management tool available to achieve effective business management.
It’s all about helping your business deliver the greatest value. Remember – there’s no universal puzzle piece to fit every business perfectly. Whatever your company structure, you’ll need to find the right fit for you.
At Noon Dalton we aim to help businesses do just this! By refining your sourcing strategies, we can help you scale and manage your teams effectively.
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