In May last year the department that I work for was outsourced to another company. This is not an unusual occurrence in the corporate world as you probably know. What was unusual was there was confusion in my old company; the contract was a global one, and locally they had misinterpreted what it said. In short they believed the work we did had been outtasked (out-tasked), rather than outsourced.

This slip up has slowly been sorted out internally by my old corporation, and you may wonder why it was a problem. The issue is, the two are very different things with different expectations from both parties in the arrangement. Which is why when I see (online business) people using the incorrect term I get a little antsy…

Let’s define out-task and outsource.

Out-task

Out-tasking is assigning work to a separate individual/group/company to complete.  This work (or task) follows your internal processes, and you maintain management of what is going on.  In short you are employing an outside employee or group to perform work the same way as you would internally.

Pros

If you have seasonal work or intermittent tasks this will ensure you have the labour to cover any headcount shortfal when task is needed.

Once-off specialised tasks can be done by contracted experts rather than employing and training new staff.

Costs may be reduced as compared to full time employees

Cons – All processes to be out-tasked should be thoroughly documented.

Less accountability by contracted staff (give a damn factor can be lower)

No guarantee that there will be consistent quality from different contractors

Outsource

Outsourcing is passing the whole kit and kaboodle to another company. Generally whole functions, departments or divisions are outsourced, and the reason why is because how everything is done is up to the new company, not just what they produce.

As an example, if you outsourced your product distribution to a 3rd party, you shouldn’t bat an eyelid if that company decided they can make your service levels using ostriches. You leave the management, writing of documentation, business decisions etc up to the 3rd party.

Pros

Specialist companies for specialist tasks

Get rid of what is not your core business so you concentrate on  what is

None of those staffing/HR worries that come with employees

Cons

3rd party might use low cost labor that may also be low quality

Your reputation is affected by anything negative that 3rd party does (see the Stompernet launch recently)

Loss of know-how of how to accomplish that task if you want to bring back in-house

I think we can see that the majority of what online business people do is out-task, not outsource. It is critically important that if you want to feel authentic as a business person that you use the correct terminology and this one is most often used incorrectly.