Outsourcing Versus Sourcing Out

Recent events have turned most businesses towards survival and retaining market position. IT executives have followed suit. New projects are scarce even in recession proof segments such as healthcare. IT is facing the daunting task of delivering more for less. Outsourcing, particularly to emerging markets looks attractive, but employee preseveration often takes precedence.

Outsourcing, in particular, conveys quite explicitly the need to eliminate captive IT resources, not particularly politically attractive with the market exploding with unemployed resources. Consultants have created a plethora of adjectives to differentiate themselves from outsourcers: smart sourcing, right sourcing, strategic sourcing and the like. These fall under the category of “sourcing out”.

Sourcing out as the name implies covers the entire gamut of sourcing a specific function, project or even task. Understanding the true difference between “outsourcing” and “sourcing out” will facilitate breaking the grid-lock between the need to preserve human capital and reduce cost. Niche consultants find it easier to identify with companies who may be contemplating “sourcing out” a project or a task within a project. A good example of a niche player is a service provider specializing in healthcare software validation services with expertise in FDA CGMP regulations targeting the medical device manufacturers. The successful niche players also serve their markets better by being nimble and flexible in handling projects of different sizes. Traditional outsourcers will find it difficult to compete with these niche players. After all, elephants need a lot of room to dance!!