In Brief – Definition of Outsourcing and Offshoring

On July 4, 2011, in Outsourcing, by Business Development Group

What is Outsourcing?

Decision makers discussing outsourcing.

A long-term, results oriented business relationship with a 3rd party service provider according to the IAOP-International Association of Outsourcing Professionals.

It is the hiring of functional experts to handle business units that are outside of a firm’s core business. It is also a method of staff augmentation without adding to headcount as cited in The Manager’s Step-By-Step Guide to Outsourcing by Linda R. Dominguez.

Your company wants to earn more, expand services in a word – Grow! Your company has established clear cut system and standard operations and you have identified your core and non-core functions.  You can send out your non-core operations to a separate company so you can concentrate on your core functions. This is outsourcing.

What is Offshoring?

Outsourcing offshore – is the practice of hiring experts in other countries to handle business processes that may be outside of your core business focus, in order to reduce costs, enhance quality, improve productivity and accelerate growth.

 “Companies are no longer just outsourcing. Today, they are building global corporate ecosystems linking people, processes and technologies across the traditional boundaries of the business” as cited by IAOP. 

Thus, aside from a stable process, knowledge transfer, skills avalability and access of technology infrastructure – the factors to consider for offshoring should also be maturity on both managing to a remote location as well as managing a different culture.


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7 Responses to “In Brief – Definition of Outsourcing and Offshoring”

  1. HRCOUNTESS144 says:

    This is good! Very good! Would appreciate it though if you can give more lowdown on where is the most feasible destination to outsource..

  2. BPO girl says:

    This is a really informative site just like this other BPO site I usually visit.

  3. Thank you for the information

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