Outsourcing Times

February 13, 2007

Let’s Shore It Up

By Priya Jestin, Staff Writer

There is a lot of technical lingo associated with the outsourcing industry. While most of us are familiar with these terms, I’ve noticed that there is no consistency in how these terms are interpreted. Here are a list of the most common terms in the industry, and their most widely accepted definitions.

• Offshoring: It is sometimes used interchangeably with outsourcing. While this may not be totally wrong, offshoring essentially involves relocating a business process including production/ manufacturing to another country – usually a low-cost alternative. Alternately, it could also mean an organization using the services of another firm that may be located in another country.
• Outsourcing: In outsourcing, a particular internal function of the company is assigned to an outside supplier. For instance call centers in the BPO industry are an outsoured function. Firms outsource to save money, improve quality, and also free their resources for other activities.
• Homeshoring: As the name suggests, if a company decides to transfer some of its work from offices to home-based employees, it is called homeshoring. Homeshoring, which is a good combination of outsourcing and telecommuting only requires that the employee have appropriate telephone and internet facilities to work from home.
• Inshoring: Sometimes, offshoring companies set up offices in the US or Europe. This is done to attract customers who may not have the resources or may not be amenable to offshoring
• Nearshoring: China, India and the Phillipines may still be the destinations of choice for many firms. But increasing number of firms want to get their work done in countries nearer home. For instance, they’d rather prefer getting work done in Canada, or East European countries like Poland, Russia and Rumania.

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February 13, 2007 in Opinion | Permalink

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