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Outsourcing vs Crowdsourcing – How to Select between Both

Outsourcing and crowdsourcing, though considered by many to be sort of similar, are as different as chalk and cheese. While both involve getting the work done outside the regular office, the consequences can be totally different.

Sending out critical and non-critical internal processes to a competent offshore firm is outsourcing. The firm will generally work with you as a partner to achieve common goals, rather than the conventional supplier-client relationship. There will be plenty of scope for both the companies to widen the collaboration. The system works to the advantage of all the stockholders, regardless of the number and complexity of the projects outsourced.

Crowdsourcing, on the other hand, can only be successful for small, granular tasks, done without regard to the larger scheme. 5-10 min tasks are sent over to workers like a set of pipelines. Though the time is extremely short, the system does not suit large, complex processes that require a formal set up.

Method of Working

Outsourcing is limited to third party vendors, who hire people on fixed salary to work on outsourced projects. Workers report to the immediate managers, who would coordinate with the company that has outsourced work.

The people working in the crowdsourcing set-up are usually freelancers, who would compete within themselves to get their work selected by the company. The latter will compare their work and select the tasks that fit the bill.

Quality of Work

In outsourcing, there is a set procedure in place that ensures optimal quality in work. Reputable vendors have a training system in place and if you plan to train your team, they will be willing to let you do that. In fact, there are vendors who will allow you even to recruit your team and set up customized quality control process. Different levels in quality monitoring ensure that the process is on track.

Crowdsourcing often leads to poor quality of the end product. Projects can be bagged by amateurs just because they have quoted the lowest price. Moreover, there is lack of person-to-person contact, leading to poor coordination. Any quality monitoring system is absent as well.

Scale of Working

When working with reputable outsourcing companies, the scale of work is limitless. Thanks to the flexibility, you can quickly scale up or down your team. You can outsource a process fully, or create a system that segregates it between your in-house and outsourcer’s teams. Moreover, as the administration, payroll and IT support is taken care of by the service provider, you don’t need to invest for creating the infrastructure. With zero capital investment, you get going.

Crowdsourcing suits scenarios where the budget is very low and the tasks are simple enough to be assigned individually to the freelancers. However, as the complexity of tasks grows, you have to look for other options.

You need to analyze your objectives before taking a call between outsourcing and crowdsourcing, or finding a way somewhere in between. There is no cut and dried formula in the world of business, and you need to take a decision guided by your specific requirements.

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