Outsourcing And Offshoring: Important Things To Know

Outsourcing and Offshoring are two terms which are commonly used by business companies. While the two terms may look similar but the two have very different meanings when looked at more closely. Here is an article that explains the two in detail, brought to you by BizBoon, a leading business process off shoring service provider that helps your business reduce operational cost and explore new opportunities & markets.

What is outsourcing?

Outsourcing is the process of hiring another individual or company, either domestically or internationally, to handle business activities for you. Outsourcing involves contracting certain aspects of your business to a third party, like an online freelancer or an agency.

What is Offshoring?

Offshoring is the process of outsourcing work to a country other than where your business is based.Offshoring helps companies explore entrepreneurial opportunities outside their own country. The biggest motivating factor to have one’s work offshored is to reduce labor expenses.

What is the difference between the two?

·         Outsourcing may take place either inside or outside of company's home country, offshoring on the other handiswhen a business moves all or some of its activities to another country. 

·         The biggest difference is that while outsourcing can be offshored, Offshoring may not always involve outsourcing.

Things to keep in mind when Outsourcing or Offshoring

·         Find a vendor whose interests are clearly aligned with your business goals.

·         Make sure both the organizations can work together seamlessly.

·         Make sure the company you choose to work with offers a balance of good value and quality results. 

·         Business owners need to do their own due diligence with regard to potential outsourced partners. This may include calling references or speaking directly to the principles of the firm, in addition to reviewing portfolio work.