SQLAuthority News – Definition – Outsourcing, Offshoring, Nearshoring, Offshore Outsourcing

Outsourcing – Outsourcing is subcontracting a process, such as product design or manufacturing, to a third-party company. Outsourcing involves the transfer of the management and/or day-to-day execution of an entire business function to an external service provider.

Offshoring – Offshoring describes the relocation by a company of a business process from one country to another – typically an operational process, such as manufacturing, or a supporting process. Companies subcontracting in the same country would be outsourced, but not offshoring.

Nearshoring – Nearshoring means sourcing service activities to a foreign, lower-wage country that is relatively close in distance or time zone (or both). Nearshoring is understood to mean that the business has reduced the complexity and risk of offshoring.

Offshore Outsourcing – Offshore outsourcing is the practice of hiring an external organization to perform some business functions in a country other than the one where the products or services are actually developed or manufactured.

Here are few of the advantages:

• Cost Saving
• Staffing Level
• Focus of Organization
• Morale
• Flexibility
• Knowledge
• Accountability

Along with advantages, there are few disadvantages as well. For example, outsourcing brings risk of exposing confidential data to users and that can be the biggest issue in a new world where data privacy is prime most important for any organization. Though some organizations play time zone as an advantages, for some organization, it is still a challenge and due to time zone difference, the challenge of synchronizing the deliverables is one of the prime concern.

Reference: Pinal Dave (https://blog.sqlauthority.com)