Difference of Offshoring and Outsourcing

Difference of Offshoring and Outsourcing

What is the difference between Offshoring and Outsourcing? Although the two may sound the same and have some similar properties, there are some distinct differences between offshoring and outsourcing.

What is Outsourcing

Outsourcing is a general term, meaning to obtain certain services from an external company. General term, delegating part of your business to a third party.

The main motivation is to use the opportunity to have an easier access to a talent pool with specific capabilities. While some people associate outsourcing with a company in a foreign country, it is not necessarily true. You can outsource your work to a company located anywhere, even in the building next to you.

The companies which need outsourcing are generally looking for personnel for a specialized activity which is either too costly to perform internally or they don't have the workforce skilled enough to undertake the job. Outsourcing is often less costly and less time consuming.

Outsourcing refers to the act of contracting a third party company to carry out certain functions of your business. Outsourcing can be done for the sake of reducing operating costs as outsourcing is more cost effective than hiring an in-house team. Another reason why companies outsource services is to avail expert or specialized skills that their own team does not possess.

What is Offshoring

Offshoring means using a third party from distant, foreign countries to outsource business processes. Outsourcing within home country and nearshoring give the parent company geographical, temporal, cultural, linguistic, social, political and economic benefits. Offshoring gives mostly cost benefits.

Offshoring usually means delegating to another company, in distant countries, some of your business activities.

Referring to software development, it means to pass on some or all of your software development to a team overseas. The advantage of offshoring is significantly lower costs. On the other hand, the disadvantage is the time difference, high visit costs, delivery time, language barriers, and cultural difference.

Set Up Offshore Office

Setting up an offshore office may be a start for any company planning to expand their business. To begin with, the company need to choose their offshore provider. Next, the necessary paperwork must be submitted such as the team requirement, technology that needed to be use, headcount of team. Finally, the human resource can start looking for the successful candidate and setting up of their workstation can begin.

• Quality - In most cases, you won’t find any differences in the quality of the workforce. It’s a pool of talented offshore team at an affordable price.
• Location - Make sure that time zones are not a problem. Not to mention a good command of English and general skill level of developers. 
• Technology - In an ideal world you want to work with companies hiring employees with good ethics and passion on what they are doing. 
• Cost Effective - Offshore countries have lower cost of living so they can afford to offer lower fees compared to onshore software development companies.

The entire process takes up time, effort and proper research in order to carry out the task. In addition, it might be difficult to find reliable construction firms who can produce the desired offshore office. Fortunately, there are corporate services that can assist in finding an office space in ideal locations.

Does your business need to set up an offshore office today? Are the complexities of building an office taking up much of your time? Learn on this blog how you can set up and find an offshore office.

Considering Offshoring

Are you considering offshoring? If so, contact AS White Global today to arrange a free consultation.

Considering offshoring of a company to get their various services handled in a different country to make the most of different factors.

Benefits of Offshoring:

• Cost Savings - When any service or function gets offshored, it is usually for the benefit of cost reduction. Small business owners know providing customer service is important but staffing up can be expensive. One pro for offshoring customer service is that it can cost you a lot less than hiring one or more full-time employees. Not only will you save money on not having to pay employee benefits but you can also offshore for just the hours per week that you need instead of the standard 40 hours.
• Skills - Due to various reasons, there are certain geographical areas where the locals have developed skills in a particular industry or sector.
• Resource Management - Companies often choose to offshore or outsource to neighboring countries, as managing workers who are in relative geographic proximity is easier than those in farther regions. The distance and the time zone difference affects the communication and collaboration between the company.

Generally offshore is the form getting more work efficiency, many companies are going toward offshore development.  Offshoring is a big move to make for your business, resulting in either a big level up or a scary downfall on the market’s competitive ladder. It all depends on your choices, so be sure to study when you are considering offshoring carefully before making hasty decisions.