Outsourcing Versus Crowdsourcing: Who Wins The Battle?

By David Stern | August 24, 2015



crowdsourcing_v_outsourcing.jpgCrowdsourcing. Outsourcing. They look alike, they sound alike -- so what’s the difference between the two?

Both are used by businesses to get projects done in a timely manner, by professionals who bring special expertise. Both rely on an external community for ideas, resources, work and more.

But, the similarities end there, because while crowdsourcing and outsourcing sound alike, there’s a clear distinction between the two.

Outsourcing is based on a linear work flow model. Work is transferred “off-site” -- sometimes overseas, sometimes domestically, to an identified group of workers whose job is to bring standard solutions.

Crowdsourcing, on the other hand, is like the rebellious sibling to outsourcing. Crowdsourcing breaks boundaries, seeks innovative ideas, gains efficiency in the process and might surprise you with its global perspective.

Outsourcing remains a best practice in some business endeavors. But the Internet boom has created an ecosystem in which crowdsourcing can thrive. We think that outsourcing will find it hard to keep up, and here’s why:

  1. Online communities: The concept of crowdsourcing rests heavily on groups of people or communities that band together around common threads of interest, whether offering freelancing services on a platform or as brand followers pr product evangelists. Three billion people are online today and ready to contribute value as a part of many online communities. Delivering shared value with their participating communities is a key tenet that sustains crowdsourcing, and the trend only continues to accelerate.

  2. The innovation mindset: A critical factor that has led to the growth of seeking crowds for solutions is the realization that innovation can come from anywhere. Given the choice, why wouldn’t you tap into hundreds of thousands of smart and creative people, instead of relying on a team of 10?

  3. Work management and collaborative tools: Working remotely, sometimes called “cloud labor,” is no longer a far-fetched idea. Among the large Millennial generation are many who are seeking a work-life balance, and the concept of working without being dependent on a location is gaining traction. Thanks to the vast steps forward in cloud and web-based technology for project management, time keeping, productivity and collaborative tools, we don’t see the momentum toward working remotely slowing anytime soon.

  4. Payment technologies to pay the global workforce: The icing on the cake is the latest technologies in cross-border payments that make it possible to hire a global workforce through crowdsourcing. A service like Transpay, through its proprietary direct-to-bank network and vast network of cash pick-up locations has made it easier than ever to get paid on time, with no hidden fees and with the best exchange rates for work done through the crowd economy.


Are you an Active Participant in the Crowd Economy?

Check out the benefits of using Transpay's proprietary backed network for cross-border payments.



Topics: Blog, Cross - border payments, sharing economy, outsourcing, crowd payments

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