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outsourcing versus offshoring

Outsourcing Versus Offshoring

Outsourcing vs Offshoring comparison and explanation

At Ilerra some partners raise the question of outsourcing versus offshoring. In order to answer this question, we need to look at:
– What is outsourcing (outsourced) ?
Outsourcing is a practice that a person or company performs a software development task or project for another company to Reduces Cost of Operations, Improves Productivity, and Increases Flexibility.

– What is offshoring (offshored)?
Is basing some of a company’s services overseas, so as to take advantage of many benefits specially lower costs. Now we get to a conclusion of outsourcing versus offshoring by stating that offshoring includes companies who transfer customized software development to a location abroad with or without outsourcing the job to another company.

Deciding between offshoring vs outsourcing includes multiple factors. Both routes together or also can leas to a significant cost savings. You may freely consult with Ilerra by stating you want to know what best fits your company based only our company’s needs from outsourcing vs offshoring.

Offshoring can be implemented in a couple of known ways. Either you have your own team offshore, or you hire a 3rd party that hires its own offshore team. While with outsourcing there is no option of having your own team, but rather the process is always set to hire an outsourcing company (3rd party) to do your work either inshore, offshore or even outsourcing local. By this we understand the difference and commonality of offshoring, offshored, outsourcing, outsourced.

As stated in by Alika Cooper, answering the question of “What is the difference between outsourcing and offshoring?”
Her answer was:
“Outsourcing refers to an organization contracting work out to a third party, while offshoring refers to getting work done in a different country, usually to leverage cost advantages.”

Furthermore, “Outsourcing is a common practice that businesses use to cut expenses, gain access to employees with a special skill set, and obtain other benefits. Offshoring is sometimes referred to as a subset of outsourcing. The biggest difference is that while outsourcing can be (and often is) offshored, offshoring may not always involved outsourcing. Both may save company money, but only offshoring specifically means sending jobs out of the country.”

By this we have covered the major topic of outsourced versus offshoring, and the basic definition of “Outsourcing vs offshoring”.

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