The Difference Between Offshoring and Outsourcing | ASW Blog

Outsourcing: Utilising the services of a third-party provider in another country. Offshoring: Work is completed in another country by a ... AboutUs ManagementTeam OurProcess OurCulture OurClients DataSecurity FAQ’S Offshoresolutions Accounting&Finance Construction&Engineering Creative&Marketing HealthCare InsuranceServices IT&Software LegalServices Sales&Administration Transport&Logistics Careers WorkingEnvironment Collaborate Balance Develop Leadership TalentAcquisition Vacancies Media ClientCaseStudies EmployeeCaseStudies News Blogs ContactUs Blogs Blogs AllMediaViewAll TheDifferenceBetweenOffshoringandOutsourcing May31,2021 Outsourcingistheumbrellatermfortheprocessofcontractingathird-partyprovidertoperformthetasksthatyouwillassigntothem.Strictlyspeaking,thereareseveralformsofoutsourcingstrategiesandoffshoringisoneofthem.Otherkindsofoutsourcingincludenearshoring(outsourcingtonearbycountries)andfarmshoring(outsourcingtoruralareasinthesamecountry).  Outsourcingandoffshoringmaybesimilarinthemostbasicsenseinthatyouareassigningateamfromanotherlocationthat’sphysicallyoutsideofyourlocalcompany’spremisestodospecificbusinessprocesses.Anothersimilarityisthatcostefficiencyandoverallproductivityareusuallytheunderlyingreasonswhyoutsourcingandoffshoringservicesareemployed. However,therearestillkeydifferencesbetweenthesetwomethods.Understandingthesedifferenceswillhelpyoudecideonwhichoptionwillbestsuityourbusiness,dependingonyourgoalsandtheservicesthatyourequire. WorkAssignments  Outsourcing:Utilisingtheservicesofathird-partyproviderinanothercountryOffshoring:Workiscompletedinanothercountrybyadedicatedteam Withoutsourcing,theworkthatyousendiscompletedbyananonymousstafforfreelancersfromadifferentcompany.Theyarenotconsideredfulltimeordedicatedemployeesofyourorganisation.Therelationshipanddelegationoftasksistypicallyviathesolutionsproviderratherthandirectlytoteammembers. Throughanoffshoringservicesprovider,youcanoutsourceaspectsofyourbusinesstoadifferentcountry.Whilstoftentheemployeecontractisbetweenthesolutionsproviderandtheclient,staffarehiredasadedicatedremoteworkforceforyourcompanyonly.Theoffshoreemployeeorteamisbasicallyanextensionofyourcompany’slocallybasedstaffthatyoucandirectlymanage. Functions Outsourcing:ReferstoaspecifictaskOffshoring:Outsourcingacompleterole Outsourcingusuallyinvolvesthehiringofaworkforcetoperformaspecificsingulartaskwithinaprocesschain.Whilethesetaskscanbetedious,repetitive,andtime-consuming,thesefunctionsarevitalastheyhelppromoteproductivitybystreamliningtheoverallbusinessoperations.Thesetasksaretypicallymeasuredintime,quantity,andquality-basedactivitiesandinmassvolumeofheadcount. Offshoringinvolvesassigningmorecomplexfunctionsandmoreengagedworktoadedicatedteamfromanothercountry.Theoffshoreteamiscomprisedofspecialistswhoarewell-trainedandhighlyexperiencedintheirrolesthatinvolveamyriadoffunctionsandrequireadeeperlevelofresponsibilityandinitiative.  Accounting&FinanceSalaryGuide:CriticalinsightsforbuildingyourdedicatedteaminthePhilippines DownloadNow Involvement Outsourcing:Littleinteractionintalentacquisition,developmentplansandperformancemanagementOffshoring:Fullyinvolvedintalentacquisitionandintegrationofoffshoremembers Inoutsourcing,thethird-partyproviderconductstherecruitmentandtheinterviewswithoutyourinvolvement.Sincesomeoutsourcedtasksarenotentirelydependentonhavingtolearnin-houseknowledgeofyourcorebusinessoperations,thereisnoneedforyoutofullyintegratetheoutsourcedstafftoyourcompany.Itisthethird-partyproviderwhowillsupervisetheteam,providetrainingandconductperformancemanagementprocesses. Inoffshoring,youhavecompleteinvolvementinthehiringandeventualselectionofyourcandidates. Thisincludesprovidingyourspecificrequirementstotheoffshoreservicesprovider,selectingfromtheirmostqualifiedcandidates,interviewingthem,andapprovingtheiremployment. Youarealsoinvolvedinthedirectmanagementoftheteamtoensurethattheirworkisuptoparwithyourbusinessstandards.Itisexpectedthatthenewmembersofyouroffshoreteamwillundergoanonboardingprocessthatexplainsyourcompany’sculture,objectives,andprocessessotheyarecompletelyalignedtofulfilyourbusinessgoals. QualityofWork Outsourcing:Qualitymayfluctuatedependingonwho’sworkingontheprojectOffshoring:Yousetworkqualitystandardsthatyourteamadheresto Outsourcingmayaffectthequalityofworkbecausethemembersoftheteamarenotdedicatedworkersforyourcompany.Asaresult,theyarenotentirelysubjecttoyourproductioncontrolvalues.Sincetheyarenotregularemployeesofyourorganisation,differentmembersoftheoutsourcedteamwillbeworkingonyourproject.Thismayalsomeantheyarehandlingprojectsfromvariousclientsthatmaybegivenmorepriorityoveryours,whichcanaffectyourproductiontimetable. Offshoreteammembersareconsideredasregularemployeesofyourcompany.Justlikeyourlocallybasedteam,youroffshorestaffarealsorequiredtoupholdyourcompany’sstandards,policies,andprocesses.Sincetheyarededicatedtoworkonyourcompany’stasks—andnotforotherclients—itisexpectedthattheyarefocusedonlyontheworkthatyouassignthemto.Thiswillensureconsistencyintermsofdeliveringhighqualityoutput.Staffqualityisreviewedinpartnershipwiththesolutionproviderandformspartofstaffperformanceevaluations. TimeandScalability Outsourcing:QuicksolutionforquickprojectsOffshoring:Long-termsolution,idealforscalability Outsourcingisscalableinthesensethatitisafastandefficientoptionforadhocorperhour-basedprojects.Outsourcingcansolveproblemsforpeaksandtroughswiththeabilityto“flexupanddown”staffwhenneededinperiodictimesoftheyear.Whenadditionalsupportisneededduetopeakseasonsofyourbusiness,suchasfilingincometaxreturns,outsourcingthesefunctionscanbeanidealsolution.Giventhehiringprocessisupontheprovider,theleadtimetohireshouldbequitequick. Anoffshoreteamallowsyoutoscaleitssizebasedonyourbusinessneeds.Thereisnoneedtoheavilyinvestupfrontonmanpowerandequipmenthoweverisconsideredtheidealfitforthoserequiringafull-timeemployeecapacity.Startoffwithasmallteamorlargeteamandasyourbusinessexpands,youcandiversifytheteambyaddingmorerolesasrequired.Itisconsideredalonger-termapproachgiventhehiringprocessismorepersonalised. Checkourhandycomparisontableforyourat-a-glancereference: Outsourcing Tasksaredelegatedtoathird-partyprovider Typicallyreferstotheoutsourcingofaspecifictask Ageneraltermforutilisingtheservicesofathird-partyproviderinanothercountry Workisaccomplishedbyananonymousteam Littletonoinvolvementintalentacquisition,developmentplansandperformancemanagement Qualityofworkmayfluctuatebasedonwhichteammemberworksonprojectorcompetingclientpriorities Quicksolutiontoaccomplishtasks–idealforadhocorperhourprojects Offshoring Tasksaredelegateddirectlytoadedicatedteammember Referstooutsourcingacompleterole Workiscompletedinanothercountrybyyourowndedicatedresource Workisaccomplishedandmaintainedbyyourownglobalteam,anextensionofyourcompany Usuallyinvolvedfrominterviewtooffer.Fullintegrationintoyourteamundercustommanagementarrangements Yousetworkqualitystandardsthatyourteamadherestoandupholds Long-termapproachtoscalingyourbusiness LeveltheplayingfieldwithASW’soffshoringservices Inthishighlycompetitivebusinessenvironment–compoundedfurtherbythepandemic–thedemandforoutsourcingandoffshoringserviceshasincreasedsignificantly.Asof2021,thereareover30,000businessesinvolvedintheBusinessProcessOutsourcingIndustryinAustraliaalone. Thankstodigitalplatforms,internetconnectionimprovementsandcloud-basedsystems,opportunitiestoaccessawiderpoolofhighlyskilledtalentshaveexpandedexponentially.ASWofferanextensiveworkforcenetworkfromVietnam,Malaysia,andthePhilippinestogiveyouthemostqualifiedcandidatesforyourbusinessfunctionrequirements. Readmoreaboutouroffshoringprocessorcontactusifyouwouldliketoarrangeadiscoverycallwithoneofourspecialists.  LatestBlogs HowDoYouCheckforComplianceinOutsourcedHealthcareServices? ReadMore TopHealthcareTrends:WhyOffshoreStaffandOutsourcingisEnablingGrowth ReadMore TheImportanceofComplianceandSecurityinOutsourcingHealthcare ReadMore TrustedbyleadingAustralianorganisations DownloadFreeAccounting&FinanceSalaryGuide TheSalaryGuide CompanySize1-1011-5051-200200-2000