Offshoring vs. Outsourcing
Offshoring and outsourcing are two often interchanged terms in the field of Information Technology. Outsourcing is a process wherein a company gets its products or work done by an outside party involved. In offshoring, on the other hand, these functions are performed in a foreign country or by a foreign subsidiary.

It can be described by a relocation of a company’s business process to another country. Services which can be offshored include manufacturing, supporting process, and accounting.

The People’s Republic of China is a well known destination for production offshoring specifically in the field of telecommunication services. Other countries like India, and the Philippines have also emerged as top destinations for the service.

Companies prefer to offshore its services mainly to reduce cost, while acquiring the same level of productivity. More often, the products or services that a particular country costs the least for them to produce are the services being offshored.

Meanwhile, outsourcing refers to “the movement of internal business processes to an external company.” For instance, an organization outsources a part of its business operation to another firm. In outsourcing, the production undergoes stringent measures to establish efficiency and productivity.

E-mail services, payroll and call center, are some examples of popularly outsourced services. It is important to note that delegating the job within the same country would be outsourcing, and not offshoring; while a company moving an internal business unit from one country to another is offshoring, and not outsourcing.

IT Offshoring has also become a trend, since the notable evolution of the internet and telecommunication globally. Through offshoring, transferring the actual location of services to a much affordable country became possible.

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