What is co-sourcing?

Published November 30, 2012

1 min read

Given the choice of adding more in-house staff or contracting third-party personnel to complete tasks, more and more organizations find co-sourcing is a better alternative. The Business Dictionary defines co-sourcing as "the combining of services from within and outside a business to achieve the same goal."

In-sourcing requires taking on additional personnel to provide the expertise or manpower required for a given task, creating a fixed cost. Outsourcing eliminates the fixed cost, but often results in loss of control over the process. But a new paradigm has arisen.

Co-Sourcing

Co-sourcing is similar to hiring a consultant or contractor on a continuing basis. With co-sourcing, you obtain an external resource that becomes an integral part of your team, working side-by-side with your on-site personnel.

Outsourcing routine tactical processes to allow staff members to focus on business-critical, strategic projects has developed as a routine management strategy. However, additional expertise is occasionally needed to accomplish strategic goals as well. Co-sourcing vendors provide that level of expertise.

With co-sourcing, you don’t hire a consultant; you hire a coworker. For example, human resources might bring in a consultant to develop a compensation plan. Once the plan is complete, the consultant moves on. However, HR might need additional expertise in complying with employment regulations and documentation for a particular project. This requires experts working alongside your staff members. This is the time to engage co-sourcing.

The line between co-sourcing and outsourcing – consulting and contracting – remains fuzzy. When third-party vendor personnel must integrate with your staff on a deeper level, the more likely you are engaged in co-sourcing rather than outsourcing. Likewise, the longer the relationship continues, the less likely you need a consultant or contractor.

Co-sourcing can be a solution in any business process, from design and development to sales and accounting. It delivers another element to the executive’s toolbox for controlling costs, improving productivity and enhancing deliverables.

Published November 30, 2012

1 min read

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