Pic: IMAGESBAZAAR

With the process of outsourcing having its roots in the industry for a long time, another similar concept of co-sourcing has begun to emerge slowly to take its place by offering additional benefits and advantages.

Co-sourcing is a process wherein a function or task is not completely outsourced, but is instead kept partially within the domain of the company and partially handed over to an external vendor. Every company today seeks a certain control of all its departments and functions, so as to keep a check on the performance levels and at the same time, retain the knowledge and experience gained by carrying out those functions. As a result, the concept of co-sourcing is taking companies by fire and is grabbing their attention.

Sanjay Dua, senior VP, sales, marketing and corporate HR, Keventer Group tells us why co-sourcing is better than outsourcing, "In case of co-sourcing, the control of the functions remains with the organisation, as only a partial segment of the business is being offered to the business partner. As a result, the quality of the performance, transparency of the processes, etc are much better monitored than in the case of outsourcing where the entire function is being offered to the business partner. This also helps in controlling the risk factors of failure, as control is still within the hands of the company."

Another important facet of co-sourcing is the retention of knowledge within the company, in spite of involving a third party in the operations. The invaluable experience gained by taking control of a certain function is not compromised as in the case of outsourcing. Soumik Bandyopadhyay, chief executive officer, ATS Group, elaborates, "Co-sourcing enables the organisation to retain knowledge and intricacies about the subject as opposed to outsourcing. Following co-sourcing as a practice allows an organisation to internalise and absorb knowledge. It therefore paves the way for innovations and improvisations, which are in sync with the organisation's philosophy and culture. The quality of the output is certainly more ‘under control' in a co-sourcing environment."

But, it is equally important to understand that co-sourcing is not a magic solution and cannot work in all cases. It is for the company to decide as to which function will work more profitably through co-sourcing as compared to outsourcing. Hanuman Tripathi, CEO, Infrasoft Technologies, explains, "Co-sourcing is always a preferred option if a customer has cost-fixed time projects or developments. In this case, the culture, processes, communication, team interaction, performance measurement, etc would be controlled by the in-house team. Once the project is over, the teams are thereby dismantled. In comparison, outsourcing is more long-term in its approach. Here, the customer can avail the benefits of not having to invest in new infrastructure, people, their training, etc. Outsourcing is considered more of a cost-saving measure and is a long-term strategy for buyer organisations as they save on price arbitrage for their highly technology-intensive work, especially where skill shortages or internal cost of resources are high and there are headcount restrictions."

Companies should certainly explore this option so as to increase their efficiency and control of their outsourced departments, so that an optimum level of performance is achieved.

Therefore, co-sourcing or outsourcing, both have their pros and cons. But, it is vital for organisations to identify which form fits the bill aptly and complements organisational goals.

- Palak Bhatia