What’s the difference between Outsourcing and Subcontracting?

What outsourcing is. You pass it on. What subcontracting is. The initial service provider is in control but another provider does the work.

There are things of which one should pass on some workload for the company’s development. Which is outsourcing.  The tasks that are not income related or not the best use of the owner’s time should be subcontracted.

To buy a product from someone else and sell it to others is not outsourcing, it is mere a relationship of a buyer and a vendor. Subcontracting involves an in-depth communication process of both your or the project manager with the subcontractor. Failure of the subcontractor to meet the lead directives would mean breakdown of everybody. It is not just instructions that are necessary, it is more to giving out rules and making rules happen. To make an subcontracting business successful it roots to trust, confidentiality, and coordination.

Trust is important for the subcontracting business to flourish. The presence of trust with both the lead and the subcontractor makes them focus more with making productions a hit rather than involving themselves from negative contemplations.

Equally important with trust is confidentiality. Due to tight competition in business, there are matters that should be kept confidential by both the lead and subcontractor. Disclosing private matters will result to a probable malfunction in the business. Thus, problem will arise. It does not just affect the lead contractor but significantly, the subcontractor.

Proper coordination of the lead project manager to the subcontractor is highly vital in the a service business. Coordination gives both the contractors the ability to be responsible with each other’s task. Both should move forward when things are well-planned and well talked about by both parties.

Failure to comply with the essentials of subcontracting means fall down of the business service being performed.

Common business types that are being subcontracted are in the field of:

• Analysis of Data
• Knowledge or Research Processes
• Operations in Information Technology (IT)
• Writing
• Back Office Processes
• Recruiting
• Project Bidding
• Training

Pass it on. To pass part of a responsibility, especially a business task to a third party takes a leap of faith. Subcontracting is essential for service providers who wish to retain and gain clients in the virtual world.

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