Outsourcing Vs Offshoring

Published: 25th September 2008
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Do you generally get confused between both the terms? Is off shoring a synonym of outsourcing? What is the difference?

Generally these questions strikes up when you have a project to outsource or offshore. We often mix both the terms though they have technical differences. Outsourcing is when a company hires some expert or professionals to complete a certain task. This can happen in many cases, including minimizing capital expenditure, high productivity, improved customer support and specialized skill. Outsourcing means corresponding with the provider or an expert within his area of expertise and getting the work done for the same. However, in offshoring a company can outsource its work or project outside the country or anywhere across the globe. The benefit of low cost, educated labor pool and pleasing time zones are diverting the attraction of many SMB's to offshore their work around the globe. It indicates towards the assigning some particular function of a company to another country, which could be forever or for some given period of time.

Rising Globalization has led increasing number of outsourcing and offshoring projects around the world. Small medium organizations can outsource and offshore their business to compete with the large businesses across the global while cutting down on their expenses. This also brings good news for many freelancers and part-timers as they can get a chance to exhibit their expertise while earning a few bucks too.

But there is a lot of hidden cost involved in offshoring or outsourcing the project. Language barriers, cultural barriers and sometimes timezone challenges can be a hindrance in successfully executing the project. To overcome these barriers and to ensure successful outsourcing and offshoring there are many new online services which are coming to the online market. Elance, Guru, Rentacoder and LimeExchange are some of the interesting names which are coming into the business of outsourcing as well as offshoring. These services are affordable as they are not too heavy on pockets. They charge decent percentage of the amount paid to the provider after the completion of a project. Elance charges 8 to 10%, Rentacoder rates 15% but LimeExchange takes only 8% of the total amount, wherein it provides free registration and some impressive features to mitigate the risks related to outsourcing and offshoring.

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Emma Morris on September 14, 2011 said:
Globalization has made a huge difference to how markets work. They are now 24 hours and spread right across the globe. Outsourcing and offshoring are increased with globalisation. This article does a great job at seperating the two very clearly.

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