A:

The primary difference between outsourcing and insourcing is the method in which work is divided between various companies or departments for strategic purposes. Other differences between these two business practices include control, costs, location and resources.

Insourcing is a business practice performed within an organization's operational infrastructure. Outsourcing, on the other hand, enlists the help of outside organizations not affiliated with the company to complete specific tasks. As a result, these differences effect cost, location and resource aspects of the organization, which influences decision making.

The cost associated with insourcing is different from the cost associated with outsourcing. Insourcing is typically more expensive for an organization as a result of implementing new processes to start a different division of the organization. Outsourcing uses the developed workforce of an outside organization to perform tasks.

Resources are another major difference between these two business practices. Outsourcing uses the resources of an outside organization for services and manufacturing products. Insourcing utilizes developed resources within the organization to perform tasks or to achieve a goal. For example, an organization may insource technical support for a new product as a result of having technical support setup for another product within the organization.

The organization's control over operations and decision making differs while using outsourcing and insourcing. Organizations that use outsourcing for a particular service or manufacturing process have minimal managerial control over the methods of an outside organization. For instance, an organization that is renowned for friendly customer service does not have the ability to enforce or manage how an outside support center interacts with customers.

Location is another difference between outsourcing and insourcing. Insourcing places new operations and processes on-site within the organization, whereas outsourcing involves an outside organization generally away from the primary organization's operations.

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