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Apparently both activities appear to be the same but in case of sub-contracting, the subcontractor shares responsibilities of complying with the main contract between principal buyer and the seller. However, in case of out sourcing, it may be an independent contract between the two parties.
In practical both have the same meaning. Out sourcing is giving a specified business activity to other individual or organisation. Sub contracting is sharing a business activity with other individual or organisation.
Outsourcing is nothing but delegating a particular business activity/function to another individual/entity. Sub-contracting is sharing a part of the business activity with another
outsourcing became a buzzword for businesses of all sizes, causing confusion between what qualifies as subcontracting and what is truly outsourcingSubcontracting is an older term that traditionally refers to the practice of hiring an outside company or provider to perform specific parts of a business contract or project.
Business leaders often blur the lines between outsourcing and subcontracting, but both practices are distinct, and each is governed by specific rules and regulations. The primary difference is the amount of control a company has over the work process and if the task could be performed by an in-house department.
Outsourcing was first recognized as a business strategy in and became an integral part of international business economics throughout thes. During the earlys, outsourcing became a buzzword for businesses of all sizes, causing confusion between what qualifies as subcontracting and what is truly outsourcing.
Subcontracting is an older term that traditionally refers to the practice of hiring an outside company or provider to perform specific parts of a business contract or project. In most cases, a company subcontracts another business to perform a task that cannot be handled internally. The subcontracting company and the provider work closely throughout the project, and the hiring party has a reasonable amount of control over the process.
Tasks that are outsourced, on the other hand, generally refer to processes that could be performed by a company's internal staff. Outsourcing provides a more cost-efficient solution by reserving business resources for other tasks. A company may contract an outside provider to manage its technology needs, so existing personnel can remain focused on production or sales. The third-party provider works independently to perform the necessary task, communicating on an as-needed basis.
The difference between outsourcing and subcontracting is subtle, but it is important to define the terms when businesses deal with stakeholders and clients
