Outsourcing has been around for quite some time now, and more and more businesses and companies are making use of it due to the benefits it brings. For example, to reduce labor and project costs, to focus on their core businesses, etc. However, due to different markets becoming more competitive, executives and managers have to innovate ways to stay in the competition.
Nowadays, companies and businesses have to be more creative in how they tackle their projects or tasks. So, aside from outsourcing, other processes of doing things have sprung up, and one of them is crowdsourcing.
Read on to find out what’s the difference between outsourcing and crowdsourcing.
What is Outsourcing
Outsourcing is a business process of contracting or hiring another party outside the organization to deliver products or services that the company needs. Outsourcing was first recognized in the late 80s, and in the 90s, it became an integral part of businesses.
Most of the time, outsourcing companies do the tasks usually done by a company’s in-house talent. It is a business strategy most companies use to cut costs. However, there are more benefits one can get from outsourcing, especially in facilitating growth to the company and making it competitive. For example, increased productivity, efficiency, risk mitigation, technology access, etc.
Moreover, outsourcing firms are organized entities that have their own teams and systems, used to deliver services and goods to companies that employed them.
What is Crowdsourcing
Crowdsourcing, on the other hand, is the process of obtaining work or information from a large group of people, usually from the internet. For example, the free online encyclopedia, Wikipedia, is a product of crowdsourcing. People all over the world can volunteer to contribute to the website.
Freelancers or gig workers are usually the ones dominating crowdsourcing.
Crowdsourcing, like outsourcing, can be used by businesses to tap talents worldwide and to cut costs. However, unlike outsourcing, crowdsourcing lacks a system and organization needed in helping another company for its long term goals.