Outsourcing vs offshoring: the better model?

By thescalers on 2/6/2024

Outsourcing originated as a cost-saving measure during the Industrial Revolution, while offshoring emerged later to provide companies with greater control and ownership of their business processes.

Global talent shortage, globalisation, and the need for innovation are major reasons businesses increasingly rely on outsourcing and offshoring.

Outsourcing offers flexibility, cost-effectiveness, and resource optimization, allowing companies to focus on core competencies and reduce overall costs by up to 45%.

Offshoring provides ownership, access to a vast talent pool, cost-effectiveness, and scalability, enabling companies to build remote teams in different locations.

Outsourcing involves potential loss of control, hidden costs, and a risk of lower product or service quality due to focusing too much on cost-cutting.

Offshoring may pose collaboration challenges due to geographical distance, but an experienced offshore partner can mitigate issues, ensuring proper implementation of collaboration tools and procedures.

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