IT outsourcing and IT sourcing: synonymous or completely different?

The terms IT outsourcing and IT sourcing are often mixed up in the world of information technology and seemingly used interchangeably.
However, what at first glance appear to be similar terms conceal subtle nuances that are crucial for a clear understanding of the possible applications.
In this blog post, we take a closer look at the differences between IT outsourcing and IT sourcing to shed light on their specific applications and meanings.

What is IT sourcing?

The term “IT sourcing” is an umbrella term for the procurement and provision of IT resources in general.
This can involve the use of internal resources as well as the use of external service providers, whether local or international.
IT sourcing encompasses the entire range of strategic decisions that an organization makes with regard to its IT needs.
It refers to the comprehensive approach to the procurement of IT skills and services, regardless of the source.
The term IT sourcing is sometimes even used in the overlapping area of recruiting.

What is IT outsourcing?

In contrast, the term “IT outsourcing” focuses on a more specific practice.
Strictly speaking, however, it is not a sub-term of IT sourcing, but an aliud.
IT outsourcing refers to the outsourcing of specific IT tasks, services or even entire departments or parts of a company (e.g. a call center) to external service providers.
The focus here is on the targeted delegation of responsibilities in their entirety.

So what’s the difference?

If, for example, companies purchase certain IT tasks such as programming services from an external provider on an hourly basis, this is more akin to a service contract in legal terms, i.e. “time is purchased in exchange for money”.
In this case, we speak of IT sourcing.

In contrast, IT outsourcing refers to the outsourcing of extensive projects or entire departments, such as the development of complete software or the operation of a service call center.
In legal terms, this is therefore closer to a contract for work, i.e. “success for money”.

Nevertheless, the differences can of course be fluid depending on the case constellation.
If, for example, a call center is “outsourced”, the request “provision of an efficient call center for questions about software XY” is of course the subject of the order.
However, since the call center also employs staff on an hourly basis, a service is of course also offered to a certain extent by this outsourced call center.

What is possible with both sourcing and outsourcing is, of course, outsourcing to nearby or distant countries.

Ultimately, both concepts are part of the constantly evolving IT landscape, in which collaboration with external partners is playing an increasingly important role.
We hope that we have been able to shed some light on the confusion of terms and make a case for a more differentiated use.