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Are outsourcing & offshoring different?

Are outsourcing & offshoring different?

When you have a business and are looking at how you can grow it, then you could look at things like outsourcing and offshoring. But one of the things about those two things, is that those two things are all a little misunderstood. They are often seen as things that are really similar, but they are different concepts. Both can help you to expand your business, save on costs, and have more overall control of your business, but they are distinct. So today’s post is all about these two concepts, how they differ, and how they can help your business, depending on what industry you are in.

Offshoring

Offshoring is predominantly an activity that is geography based. Because of that, it can be something that allows you to really cut down costs. Over here, goods and staff can be expensive to use for things, because standard wages and goods are more costly than in other places. But by contrast, in the developing world, there can be lower costs for the things that are sourced there or grow there, and wages as a result, are lower as well. Offshoring is something that can allow you to take advantage of these reduced costs. For many industries, offshoring has been the thing that allows much reduced costs for things like tech and other products.

Outsourcing also has the scope to work for services, rather than just physical goods that can be produced. For example, there are websites online like Full Scale, that share different reports and stories about things that are done well through offshoring, and the best places for it. As an example, India has been pretty known for its IT services. In recent years, this has been something that has been used a lot by companies all over the world, but particularly from the west. The service is provided, and you get experts in their field doing the job.

Outsourcing

Outsourcing is pretty simple to explain, because at its most basic level, it is all about assigning a task to someone else, a third party, and they take care of that remotely. So for startups especially, it can be much cheaper option to get tasks done, as you don’t have to hire employees for your business. It can be small tasks like designing a website that can be a quick job for someone else to do, or it could be a larger task like doing the tax returns for your business.

Because you just pay the freelancer or contractor to do a specific task for you, you only pay one single price, rather than the other costs that come along with having an employee. You get experts in their field to do the work for you too, so if there are things that you’re not certain on, it can be really worth doing.

Sometimes a combination of the two things can work and help your business. But they can both be considered as a tool to help your business to grow; you will just need t decide what will work best for your business.


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Christine Buske is a former academic who left science at the bench, and now considers herself a woman in tech. She is a frequently invited speaker, and enjoys talking about career transformation (particularly leaving academia for the business world), tech, issues around women in tech, product management, agile, and outreach. She is a proud Canadian resident, and qualifies as a "serial expat".

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