Outsourcing and Offshoring

Never, in recent times, have two terms been more misunderstood and feared.

Here's what these terms mean...

Outsourcing means letting an outside company execute some part of your daily operations(typically, something non-strategic) for you. Example, working with a hiring agency to find a new marketing manager for you.

Offshoring means moving part of your work to a foreign country to avail of benefits(typically lower costs).

One can offshore but not outsource -- Think of IBM(USA) getting work done in IBM(India) and saving costs.

One can outsource but not offshore -- Think of General Motors letting IBM(USA) manage their I.T systems

One can outsource and offshore -- Think, Citibank giving the design of their Website to Infosys, India.

And, one can do everything inhouse and at the corporate headquarters.

Ciao.