Outsourcing vs. Offshoring

Once e have seen the reason and downsizes about outsourcing, let’s talk about the implications it implies. Taking what Claudia has introduced, offshoring is a possible way out of outsourcing and the most controversial one.

To clear your mind; 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, typically to a cheaper location. It includes both to the setup of a subsidiary abroad, or to the outsource activities of a company.

So the question is, not just when to outsource, but when to do it through offshoring?

1. It depends on the quality you want to ensure to the client?

Ultimately, the best solution for your business depends on your needs. If you need a high level of quality and communications, outsourcing locally may be best. If you need low costs and a systematized business, offshoring is often a better solution.

2. Or maybe it depends on the relationship you must have with the client?
Activities which can be precisely specified can be offshored effectively. This is why software coding is often done in an offshore location.
On the contrary, activities that require direct customer interaction, deep domain knowledge, or deep cultural knowledge should be onshored. Thus, customer service is usually conducted onshore because of the need to be close to customers that is, to meet with them and talk to them in their own language.
Finally, activities can be nearshored, when there are little cultural differences but have the privilege to lower the cost of the work done. So, all three options are prospective depending on the nature of the project.
Apart from the reasons, the implication that offshoring has on the countries where it is stablished