Know the Difference Between Outsourcing and Offshore

With high increase of Internet usage, there are some terms floating across the World Wide Web that become more confusing. Such as offshore and outsourcing. While surfing, you usually come across these terms. Let us understand the difference between outsourcing and offshore.

What is Outsourcing?

Outsourcing is a process of getting company's business processes done by an external agency, service provide or another company for enhancing service quality, driving innovation or deriving benefits of lower labor costs. Outsourcing does not necessarily refer to sending work overseas.

Example is when a company gets work done like payroll, billing or data entry. Or when a company in Minneapolis outsource work to a company in St.Paul. Such as telephone sales and call center services.

What is Offshore?

When the services are outsourced to organizations located in other countries or to foreign agencies, outsourcing is regarded as offshoring, also known as offshore outsourcing. If a company based in New York City has subcontracted a company in India to develop their website then that company has outsourced offshore. However, offshore outsourcing

does not refer hiring employees from overseas to work in-house.

Example is telemarketers in US use Indian services because outsourcing to India is cheaper than US.

Rapid growth in web industry and cut throat competition has opened up avenues for offshore developing market Many companies opt to hire offshore developers as they can get good quality work done just at affordable rates. This factor has tremendously boosted offshore outsourcing and has become highly productive in the international market.

Let us learn about the various categories in offshore outsourcing.

There are primarily three main categories in offshore outsourcing –

• Business process outsourcing (BPO), • Infrastructure and technology outsourcing • Software outsourcing

Business Process Outsourcing (BPO)

BPO - a subset of outsourcing - encompasses internal call center internal business functions such as human resources or finance and accounting and front office outsourcing - which includes customer related services.

BPO can be further divided into back office outsourcing and front office outsourcing. Back office outsourcing is like assigning the internal tasks of the organizations such as account records or data records. While front office outsourcing refers to outsourcing the organization's call center and customer support services. Help desks, customer support services, call centers or financial services for the organizations internal operations are all parts of BPO.

Infrastructure and Technology Outsourcing

Infrastructure technology outsourcing is a kind of outsourcing that is associated with software, hardware and telecom facilities, procedures and documentations. It is includes the various services such as desktop/workplace services, integration engineering - testing and support, network services, security access and vulnerability management. A company can outsource a function or a whole operation of maintenance, administration, design, planning, installation and upgrades of the above mentioned services. It can choose any of these functions depending on its requirement and capabilities.

Software Outsourcing

Offshore software development services include software development services like website design, web development, web app development, mobile app development and various other services. India, China and Philippines are the three major countries offering software development services along with other South East Asian countries. India is the major hub providing software development services to most of the US countries.

Thus, knowing the difference between offshore and outsourcing, you will not be confused when next time you come across these terms. Hope this article must have cleared your vision about offshore and outsourcing development services.

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