We often get questions about Outsourcing and Offshoring that we’ve attempted to answer here:
What is Outsourcing?
“Outsourcing” is an arrangement in which one company provides services for another company. The service provider may be located within the same country as the client or be located offshore, i.e. in a country other than the client.
Outsourcing is a trend that is becoming more common in information technology and other industries for services that have usually been regarded as intrinsic to managing a business. In some cases, the entire information management of a company is outsourced, including planning and business analysis as well as the installation, management, and servicing of the network and workstations. Outsourcing can range from the large contract in which a company manages IT services for another company to the practice of hiring contractors and temporary office workers on an individual basis.
What is Onshore Outsourcing?
“Onshore outsourcing” (also called domestic outsourcing) is obtaining services from someone outside a company but within the same country.
What is Offshore Outsourcing?
An outsourcing arrangement is called “Offshore Outsourcing” when the service provider is located in a country other than that of the client.
India continues to dominate the market scene for offshore services both in Business Process and Technology Services with educated personnel and support from the government in providing an environment conducive for foreign companies to partner with Indian firms.
What is Offshoring?
“Offshoring” is obtaining services from someone outside the same country, but not necessarily from a different company. i.e. Offshoring can also be achieved by sending work to an affiliate of the client company located in another country. However, sending work to an affiliate as opposed to a 3rd Party can have a higher cost given the overhead of employees and infrastructure