Tharini Dasanayaka

December 29, 2021

Difference Between Outsourcing and Offshoring?

When you are just getting into the world of business and outsourcing, there are a lot of new terms and words that can make it confusing sometimes. For instance, you might have been using the terms outsourcing and offshoring interchangeably. But they are very different in meaning. So, let’s find out the difference between these two terms.

 

What Is The Difference Between Outsourcing and Offshoring

 

Difference Between Outsourcing and Offshoring

While both offshoring and outsourcing refer to a similar line of work, they are completely different processes. Whenever you are getting any of the work inside your business, done by someone outside, then that is called outsourcing. Offshoring, on the other hand, means getting that work done by somebody in another country, outside of your own. So, you see why they can often be used in very similar ways. In both processes, you are getting work done by a third party, but the location and reasons are often different from one another. Let’s take a deeper look into all the differences between these two terms.

 

  • Location

The location is perhaps the most significant difference between outsourcing and offshoring. When people refer to outsourcing, the location is irrelevant. It means you are hiring somebody outside of your business to do the work for you. This could be for cheaper costs, or better expertise, etc. Offshoring however only can be done outside the country where the main office or business is located. It can refer to both offshore branches and also independent workers or freelancers that work outside the country. 

 

  • Reasons

The next difference between these two is the reasons behind choosing them. People often outsource their work because they might not have the available expertise in-house, or within the corporation. This also allows better specialization of work. For instance, a food chain doesn’t necessarily need an in-house advertising team. They should be specializing in making food and focusing on quality. They can outsource this work to companies or businesses that specialize in marketing. This way everyone can focus on what they do best, to get the optimum outcomes. 

Companies that choose to offshore their work, on the other hand, usually have different reasons. The most common reason is labor or work in developing countries or less developed countries are usually much cheaper. There may also be certain rules and regulations that the company has to follow within their main country. But these laws may not be applicable offshore. Companies can also choose to offshore their work or open new branches internationally, to get into a broader market. 

Consider an Indian call center, for example, you don’t require specific skills to answer calls, so there’s not much need to outsource this work. But, this service is usually much cheaper in India and the company can therefore spend much less on customer support, than they would have to if they had an in-house call center department and hired people locally. 

  • Employees

Another difference between offshoring and outsourcing is who is doing the work. Outsourcing, by definition, means that the work is being done by somebody outside of the company. So these are not employees. They usually are freelancers or companies that work on a project-by-project basis or contract. In offshoring, however, if there are company branches outside of the main location of it the company is remotely hiring employees to work offshore for them, then the work is not technically going out of the company. Employees are the ones doing the work, albeit in a different location. It’s international teamwork at its best. 

 

What Does Offshore Outsourcing Mean?

 

What Does Offshore Outsourcing Mean

 

Offshoring and outsourcing aren’t always mutually exclusive and they can happen together in different combinations. Offshore outsourcing refers to a combination of the two, where you are hiring a third party to do your work, and this third party is also located outside of where you reside. Tech and IT-related work is often done like this since not all companies require to hire a dedicated tech team, but they usually need a developer to make their website for them or an app. This can easily be outsourced to a freelancer, who oftentimes works remotely from a different country. 

There are also other possible combinations of the two, where one does not imply the existence of the other. For instance, there are a lot of call centers in India working for tech companies in the United States. These companies are offshoring their work, but they aren’t necessarily outsourcing it, because call centers are still under the official brand of the company.

This is true for companies who have branches internationally and offshore their work. On the other hand, if you’re a clothing manufacturer for instance, but you hire a law firm to handle all your legal work, then you are outsourcing. But since these are laws, and laws differ from state to state, let alone internationally, you cannot think of offshoring this work. 

 

Why Do Companies Engage in Outsourcing?

 

Why Do Companies Engage in Outsourcing

 

Outsourcing has become very, very common in today’s world. The US alone outsources about 300,000 jobs annually. Most companies choose to outsource their work for cheaper costs, and when this is the reason, it’s usually offshore outsourcing. Outsourcing also usually results in better quality work and is more efficient overall. Especially when it comes to Tech/IT work, outsourcing is the first choice for many small businesses (and large) who do not have the expertise to build a proper online presence. Cesova is no different, and we do our best to provide you with ideal tech solutions to all your digital problems. 

We have an international team of people, from all over the world including the UK, Canada, the US, and even Sri Lanka, to help you outsource your work efficiently. Whether you need web or software development, or digital marketing, or even outsourcing your services, we can help you out with our industry-standard services. 

Since having an online presence is so important in today’s world, properly presenting your website or application to your clients and marketing can be the difference between whether your business makes it or not.

We are a team of creative tech experts, and we’ve had a lot of experience working with different kinds of businesses. So, rest assured, we will be providing you with whatever your specific tech needs are. Once you are sure that your business is in good hands, you can use this time to focus on the areas of your business that you’re interested in. 

This is the best part about outsourcing your work. People can focus on what they truly signed up for, without worrying about all the other hassles of building a business. Outsourcing is often much cheaper than hiring an employee to do the same work since things like building a website or an app are mainly one-time projects. Once you have it up and running, there’s not a of lot work to be done in the backend.

So you don’t need to hire an engineer full-time to do that work for you. Hiring somebody would also mean you would have to pay them every month. Whereas in outsourcing, you only pay for what you get. We work project by project basis and give you prices you won’t anywhere else. 

 

How We Can Help You Outsource Your Work

 

Difference Between Outsourcing and Offshoring

 

At Cesova, we help you outsource all your digital or tech-related work. Whether you’re a small business or just starting and you need tech solutions, we’ve got something for you. We will help you visualize, design, and develop innovative digital products to help your business reach newer heights. 

Let’s take a look at the services we offer and how they can help your business succeed. 

Web Development:

If you need to deploy a website for your e-commerce site or build a personalized blog, whatever it is you need, we can build it for you. You don’t need to code a single line, and you’ll get the website fully designed and delivered to you. 

Software Development:

Whether your business needs application development, modernization, optimization, transformation, or even maintenance, we’ve got your back. We will do our best to build solutions that fit your business’ needs. 

Mobile Development:

Everybody has a phone nowadays, and most companies need to invest in a mobile app for their services. We can help you out with Android or iOS apps, or even React-based or Flutter-based apps. No matter what your needs are, we have a solution for you. 

Outsourcing Services:

You can even hire dedicated resources from our wide range of options that include full-stack developers, DevOps developers, AI engineers, marketing resources, etc. 

Digital Marketing:

We can even help you market your business online in a way that benefits you. Whether it be social media marketing or managing your Facebook page, or even getting help with SEO, we’ve got it all. A good digital marketing game plan can help you make your business successful. 

CRO Audit and Implementation:

If you already have a website, but don’t get a lot of traffic, we can even help you out with that. We try to increase conversions by 20-70% on your website and increase your revenue. With our expert analysis, you will be seeing results in no time. 

White Labeling Services:

Our services are usually all white label, which means that you still own all of the products, even if we are the ones working at it. You can brand all your tech products as your own and still have sufficient control over them. And we do all of this with full transparency and seamless communication at the most affordable prices. 

Furthermore, if you need any other kind of help with your online and digital business presence, we are always here to help you figure a tailored solution for you. You can even get an estimate of how much it will cost you, by contacting us. 

Conclusion

While there are certain risks to outsourcing and offshoring, the benefits far outweigh them. Especially with Cesova having your back, you can let go of your worries and focus on building your business. When it comes to IT outsourcing, we are always here for you. So don’t hesitate to contact us now, if you need any help! We are eagerly waiting to hear from you.  

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