IT outsourcing vs insourcing: how to choose the right strategy

IT technologies are in demand in every progressive country. People are making great money in this sphere. Nevertheless, at the last time people have many discussions on one problem – which way of development is better? At this point, we have two ways – outsourcing and insourcing. Let`s explain the difference between these ways to understand the problem.

Outsourcing is the way of working when one company are giving its resources and functions to another for a long period according to the contract (more than one year). An easy example of outsourcing is hosting of web sites for company or organization, but very often outsourcing is used in bookkeeping because of amounts of the work.

Insourcing is the way when company uses its own resources for future projects and business plans. Very often less-busy departments take more job than they get before to do bigger amount. This method is useful when company do not want to use outsourcing.

On the first look, both options are useful especially for IT companies. But what`s the problem in it?


It could be better because companies who use it could use fewer resources and get less people to work with. They also could make such progress and do the bigger amount of work. However, for realizing the plan of insourcing the company must have:

  • Precise plan and idea of company (in what sphere of IT technologies they are going to work)
  • Team of specialists who have experience of work in this sphere. You can employ rookies, but this could make serious damage to your company.
  • Huge amount of money and resources. To work in insourcing way, company must have reserve workers and technical equipment if something will go wrong.

In addition, Insourcing Company must always compete with others. Everyone needs better income to be always in demand. If any good specialist couldn`t find new company for work, he will probably choose the best from many variants.


In outsourcing way of work, company do not worry about the amount of resources and workers because they are working with another workers and resources. Then do not need to make their company progress or to compete with others. They are just doing the same job that this company did before during the period mentioned in contract.

Nevertheless, they could have problems. They must progress. Always. They must upgrade their systems and have good specialists. If customer`s company has harder way of work as it was before, they must be ready or they will lose clients and income.

It`s difficult to compare these two types of working in IT sphere. Both of them could work better in one year and worse in other. Everything could change, and each of these methods could be useful.


Igor Grigorenko

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