Outsourcing Vs Offshoring: Check the Real Difference
Outsourcing or Offshoring?
When making a business decision, one of the toughest ones is when you are tasked to make a decision between outsourcing and offshore software development company. From an uninformed view, outsourcing vs. offshoring might seem the same, yet the difference between the two is huge.
This is why we want to discuss the real differences between the two because they seem to confuse people. In looking at the real difference between outsourcing and offshoring, we will discuss three differentiating factors i.e. definition, benefits, and risks & criticism.
Difference in definitions
Outsourcing is the process through which a business contracts an external organization or individual to perform a certain business process or task.
Offshoring is the process through which a business transfer a business operation to a different country.
The two definitions set out the real difference between outsourcing and offshoring.
Difference in benefits
The companies that outsource stand to gain from specialized skills, labor flexibility, and cost efficiencies.
Some of the benefits of offshoring include lower costs of running a business operation, getting work done faster by a pool of talented individuals, and enjoying the benefit of skilled labor.
The difference in risks and criticisms
Some of the risks that a company is likely to face for opting for outsourcing include misaligned interests of clients, overreliance on third parties, and the possibility of the in-house team remaining unaware of the critical business processes. If you’re looking for java outsourcing, software projects outsourcing or IT staff outsourcing.
Often, people criticize offshoring as a tool used to transfer jobs to other countries. Other risks that a company may face are a language barriers, geographical risk, and poor communication.
These are the differences that can help you make a decision when thinking of outsourcing vs. offshoring as ideal solutions for your business development.
If you want more information about which model can fit your business needs, kindly contact us today and we will get back to you with the best option.