Scope of Engagement
While often used interchangeably, outsourcing and out-tasking represent different levels of engagement with an external vendor for US managers.
Outsourcing
What: Transferring responsibility for an entire business function or process (e.g., all software development, all IT support) to a third party. The vendor manages the people and the outcomes.
Example: A US bank outsources its entire call center operation to a provider in the Philippines.
Out-tasking
What: Engaging a third party to perform specific, well-defined tasks within a broader function (e.g., developing a single module, running security penetration tests). The US company usually retains overall management of the function.
Example: A US retail company out-tasks the development of its mobile app to an agency, but keeps its core e-commerce platform development in-house.
Choosing the Right Approach
Out-tasking is less risky and good for specialized skills. Outsourcing can offer greater cost savings but requires more robust vendor management.
