19 August 2010
Outsourcing and offshore are interchangeably used by people. Some of them think that these terms are same. But there is different between Outsourcing and offshore. Outsourcing means sourcing from outside. The term is increasingly used to refer to sub-contracting of a set of functions or processes by one firm to another, or to a group of individuals. The latter organisation is often in another physical location, or another country altogether.

When a company's operations or business processes are outsourced to firms in foreign countries, often to take advantage of cheap skilled labor, it is referred to as Offshore outsourcing or Offshoring.

Outsourcing enables a company to focus on core-competency areas. It also frees the firm from resource and labour intensive functions, which are now performed by trained personnel at much lower costs.

The processes or activities that are being outsourced could range from customer service and telemarketing, to IT management, software development, market research and even financial portfolio management.

Most of the outsourcing firms are based in the USA, some in the UK or Australia and fewer still in Europe, while most of the outsourced workforce is Asian.

There have been loud protests against outsourcing in the USA, and more recently in Australia, since some of the professionals might be dislocated; when processes are shifted, jobs are naturally shifted too. However, this kind of dislocation is mostly temporary and there are very few highly-skilled professionals who are actually losing jobs because of outsourcing.

Benefits of Outsourcing

Reduce overheads, free up resources

Minimize capital expenditure

Eliminate investment in fixed infrastructure

Offload non-core functions

Redirect energy and personnel into the core business

Free your executive team from day-to-day process problems

Focus scarce resources on mission-critical projects

Get access to specialized skills

Reduce need for internal commitment of specialists

Save on manpower and training costs

Apart from above mention benefits there are some other Benefits of Outsourcing are as follows:

Establish long-term, strategic relationships with world-class service providers to gain a competitive edge
Enhance tactical and strategic advantages

Focus on strategic thinking, process re-engineering and managing trading partner relationships

Benefit from the provider's expertise in solving problems for a variety of clients with similar requirements.

Obtain needed project management and implementation consulting expertise.

Acquire access to best practices and proven methodologies

Spread your risks

Avoid the cost of chasing technology

Leverage the provider's extensive investments in technology, methodologies and people

Reduce the risk of technological obsolescence

Increase efficiency by consolidating and centralizing functions.

Want to Outsource your work? then contact - support[at]tissertech[dot]com