If you google “what is the difference between offshoring and outsourcing”, you’ll see hundreds and probably a thousand more results on this. But, aren’t those two the same?
Don’t worry, now, it’s when you may want to look a little deeper to understand the difference between offshoring and outsourcing and hopefully it may help you to understand better. Although the two may sound the same and have some similar properties, there are some distinct differences between offshoring and outsourcing.
Offshoring usually offers a cost-saving advantage by getting work done in different countries. While outsourcing refers to the process of having work contracted out to a third-party company.
It is completely possible to outsource work without having to offshore it. The benefits of outsourcing are aplenty – you can take advantage of specialised skills from a different company, receive cost efficiency bonuses as well as improved labour flexibility. Basically, outsourcing helps to complete multiple jobs at a faster rate, reducing costs, while running it more effectively in terms of profitable operations within your organisation.
Next, let’s talk a little bit more on the benefits of offshoring which include taking advantage of lower prices from skilled labour in a different country. In most cases, the offering of offshore options can also provide you with better availability of labour and materials as well as a much larger talent pool for getting things done.
Similarly, for offshoring, it allows your core staff to focus on more important tasks and to spend less time on tasks that don’t require immediate attention. Hence, this helps your staff to be more time focused on the bigger picture that will require more time to work on especially when it comes to making strategic decisions that will help your business to grow and develop.
You must be wondering how outsourcing first came about? It all started as early as 1980 and throughout the modern business world, this is something that happens quite often. Companies continue to grow and in order to have the skills that are necessary to continue building a company, specialised skills need to be sourced quickly and effectively in order to scale.
With both outsourcing and offshoring solutions working together, it’s possible to achieve high-quality value and expansion for your company. It is important however to remember to differentiate between the two in their full definition.
While you can outsource and offshore at the same time, offshoring doesn’t always mean outsourcing. Offshoring could be an extension of your local team but in a different country, a new labour supply or other aspects of production that can improve the overall performance of your company. Keep the main differences between these two in mind if you’re interested in making improvements in your company through a proposal to outsource or offshore.
At ASW Global, we offer impeccable solutions to build your high performing offshore global team. Contact us today to learn more about our available offshore solutions – we look forward to a long partnership and attaining your business goals at the same time.