Out-Tasking and Outsourcing for Competitive Advantage

In the previous section, you discovered that it is possible to manipulate the value chain to achieve cost reduction and competitive differentiation. One of the most effective ways to do this is to apply IT to the various value chain steps to increase the flexibility and cost dynamics of the business.

Another way in which Internet-enabled IT allows a business to reduce cost and differentiate is to provide a means to share or even off-load pieces of the value chain to other organizations. When only pieces of the step are off-loaded, this is called out-tasking. It is called outsourcing when the complete step of the value chain is done by another organization.