Has Outsourcing Become a Dirty Word?

The popular analyst authority and knowledge community for the global services industry, Horses for Sources, recently launched a survey asking professionals within the technological business services market whether the word ‘outsourcing’ should be dropped for good.

The argument centres around the fact that as a rapidly maturing market, having one generic word to cover a variety of projects may be misleading. These days it’s not all about cost-saving derived from cheap labour. Many companies that outsource business functions do so to take advantage of specialist knowledge and technologies, encourage standardisation, improve risk management and increase flexibility for their wider business strategies.   

Those in favour of a vocabulary shake up feel that the term ‘outsourcing’ has acquired too many negative connotations to be useful any longer. It has become associated with offshoring and consequential onshore job loss, and loss of control of business units. One commenter suggested, “It is time to drop the name outsourcing and come up with something that really describes what the outsourcing does to the client companies rather than just describe the end activity”. 

Alternatives include ‘subcontracting’, ‘business process delivery services’, and ‘right sourcing’. 

But is there any real benefit to increasing the jargon? No matter what term you use, utilising external resources is quite simply and literally sourcing something from the outside. As one commenter noted, “Focussing on clever ways to spin outsourcing to your remaining badged employee base is a semantic trap… Ultimately, people care about one thing – what does this mean for me and my job?” 

Ultimately, the make/buy conundrum is not a new concept and remains valid for businesses of every size. The lively debate surrounding the rebranding the term ‘outsourcing’ is therefore redundant without an examination of the root cause of the problem. “We need to change the perception of this industry by focussing on what an organisation gains by working with a business process, applications or IT infrastructure provider”, said one commenter. 

By emphasising that your outsourcing provider is a partner of the business and therefore ‘part of the team’, and being clear about the business drivers behind the decision to outsource could go some way to both tackle the wider stigma and positively engage your in-house employees in the process. 

How have you tackled the culture change when outsourcing business functions from your organisation? Do you think we need to drop the term?

Photo by Zach Klein