Outsourcing and Offshoring: What’s The Difference?

Sep 15, 2015

Many business owners use the terms outsourcing and offshoring interchangeably. However, when examined more closely, it becomes clear that both have different in meanings. Outsourcing refers to work that is contracted out to a third party while offshoring is work that is completed in another country. You can decide to outsource, but not offshore.
OutsourcingvsoffshoringTypically when a business or organization decides to outsource it is to fulfill a specific set of needs in a more efficient manner than can be done in-house. This might mean gaining access advanced skill sets and experience, advanced technology, and more competitive costs, just to name a few. A huge range of tasks can be outsourced and, therefore, many businesses find it to be a cost-effective option. In addition, outsourcing specific areas of a business provide greater efficiencies. Some of the most common areas to outsource include, human resources, information technology and accounting.
Offshoring is the process of outsourcing work to a country other than where your business is based. Work can be contracted out to an agency or individual. Businesses looking to offshore their work generally do so because they believe it will reduce their costs. While that may be true, it has become apparent over the past few years that the cost analysis associated with these decisions is often missing relevant information. In addition, offshoring presents other obstacles. The transfer of work to another part of the globe results in time differences, communication issues and in some cases political unrest. While it may cost less to offshore business efforts, in some instances project quality suffers. Offshoring has become the hot topic of political debate in America as some argue it creates a loss of jobs in the U.S.
As the world continues to become more connected, understanding the difference between outsourcing and offshoring may prove to be critical for your business. The best solution will be determined by your organization’s needs. If your business requires high-level expertise and an expanded team of professionals, outsourcing is the best option. WVC RubixCloud is your answer. We are a game-changer for businesses and organizations looking to gain a partner in their financial well-being. WVC RubixCloud creates transparency and accuracy so your organization can focus on your mission. Click here to download 9 Signs It’s Time To Outsource Your Accounting.
By: Jennifer Kinzel, Director of WVC RubixClould

Categories: Other Resources