Outsourcing and Offshoring. . . Do They Mean The Same?

  • April 18, 2011
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By: Roy Jonathan del Rosario

Words are so multifaceted that they seem to have a variety of definitions that may somewhat mean the same or nearly-similar for some circumstances. It shows how versatile the modern language is, that it could give us a hard time figuring out what a multifariously-defined word really meant in a certain communication process. And in the business industry where words are often being modified, it will probably be hard to understand the more appropriate sense of a certain business jargon if there is just a little understanding about it. Plus the fact that the wordbook is not that reliable when it comes to the most recent business buzzwords.

In the outsourcing industry, the terms ‘outsourcing’ and ‘offshoring’ are most commonly interchanged due to people’s lack of good understanding about it. In light of this, a study conducted by foreign research organizations provided viable and more appropriate definitions of the two words.

According to the study, OFFSHORING is the act of relocation of a company when it opts to do its operation overseas or in other country chiefly to hire workers from the third world countries like Philippines and India because of low employment cost. A customer service function may be offshored from the original site, which is where the business really is located, to a foreign country, but it is still done or operated by agents who work for the business, though located in a foreign land.

On the other hand, OUTSOURCING is a make-or-buy decision where a business opts to avail a product or service that was previously done internally. For instance, when a firm outsources its customer service function, it chooses to purchase that service from a third-party provider that has expertise in a certain field.

Now it’s clear. I hope it will finally be unmistakable to the readers and I hope you finally have grasped on the most appropriate definition of these two outsourcing-essential terms.

Source: http://www.processor.com/editorial/article.asp?

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