Concept of outsourcing and offshoring

“Nowadays, a business world is much more competitive and business owner is facing a  lot of challenges, challenges to cut the cost, to increase the productivity, and to use the resources efficiently and effectively.”

While there is no silver bullet to these issues,  the concept of outsourcing and offshoring can  help the business owner to run the business smoothly. But it is important to note  these two  term outsourcing and offshoring are not interchangeable, as there is a huge difference between two terms. Outsourcing is basically taking service from third parties, rather than produce it yourself, On  the  other hand, offshoring  means moves the location of a service overseas. Offshoring is basically a subset of outsourcing process. When the service is outsourced to organization located in other countries or to foreign agencies, the process is named as offshoring or known as offshore outsourcing.

For Example: when a business organization or a corporate enterprises based in New York city has subcontracted their work process to a outsourcing company in India to develop their website  then it is called as offshoring.

The two terms outsourcing and offshoring can be combined, if the company takes outsourcing service  from a company  located in abroad. In today’s  era, both  offshoring and outsourcing market is expanding at a significant rate, as it is round the clock, accurate and affordable.

Types of offshore Outsourcing

• Information Technology Outsourcing (ITO)

IT outsourcing refers to outsourcing all or parts of IT function to third parties. Information Technology (ITO) term can be used as  a subset of BPO. It is also known as IT enabled services (ITES) outsourcing.

• Business Process Outsourcing

BPO is also a subset of outsourcing which involves the contraction the operation and responsibilities, whether voice or non voice to the third party.

• Knowledge Process Outsourcing

KPO describes the outsourcing of core information, related business activities which are competitively important or form an integral part of the company’ value chain.

• Legal process outsourcing

Legal process outsourcing or LPO consist of outsourcing legal supporting works connected with litigation activities for a business firm. In legal process outsourcing legal works such as document review, contract creations, contract management, legal research, legal drafting, agreement preparation, document translation etc are outsourced.

The key benefit of outsourcing and offshoring

• Lower Cost
• Better availability of skilled person
• Getting work done faster through a global talent pool.

The typical destination of outsourcing is India for America and European Countries.

Nupur Jain