For many business owners, outsourcing and off shoring have the same meaning; sending work, that would otherwise be completed in-house, to individuals or firms based in other countries. While both the terms may seem similar, they actually have different meanings if one looks more closely.
“Outsourcing is a practice used by different companies to reduce costs by transferring portions of work to outside suppliers rather than completing it internally.”
The amount client pays to the service provider is often linked to outcomes. The staff members are under the sole control and direction of the outsourcing service provider.
Benefits of Outsourcing:
• Costs are arguably the chief motivation behind outsourcing. Companies often find that contracting work out to a third party is cheaper.
• Companies often don’t have in-house expertise for certain activities like logistics and transporting. In these cases, it is more efficient to outsource these tasks.
• Outsourcing allows a company to increase the production rate as quickly as needed. For example, a company may need a large number of programming experts for 6-8 months to develop an app. It would be infeasible to hire people for only 6 months. That is where outsourcing helps.
“Off shoring is the moving of various operations of a company to another country for reasons such as lower labor costs or more favorable economic conditions in that other country.”
The client has direct managerial control over the staff and is involved in the recruitment process to select their offshore team.
Benefits of Off shoring:
• Organizations usually offshore manufacturing or related services to developing countries where wages are low, thus resulting in cost savings.
• The competitive advantage of nations often means that some countries develop a much better ecosystem for certain types of industries. This means that there is a better availability of skilled human resources in that region for specific types of tasks.
So, it is clear that outsourcing and off shoring have different meanings. Avail outsourcing or off shoring services of Mobitsolutions and get advantages like cost savings, labor flexibility etc.