Watch this video to learn the definition and difference between outsourcing vs offshoring. You will also learn what is offshoring and what are the advantages of it. Why you should consider offshoring and outsourcing for your business.
Offshoring Definition - So Offshoring is the practice of obtaining products or services from another country or relocating production to another country.
What is Outsourcing?
Outsourcing refers to obtaining certain services or products from a third party company.
Video also tells how the captives became stand-alone BPO providers, with the originators as initial clients.
The most important thing in this video is about offshoring and outsourcing models. The important models are A. Global Shared Services, B. Hybrid model, C. Multi-sourcing model, D. Global Delivery model, E. Build-Operate-Transfer (BOT) Model.
A. Outsourcing through Global Shared Services,
There are a lot of advantages of a shared service center like Reduced cost
Faster turnaround Improved efficiency and accuracy by avoiding duplication, inconsistency, and conflict of processes and systems.
B. Outsourcing through Hybrid model,
Hybrid model is apt for most of the businesses, it often can not compete with a purely offshore model in terms of cost which is way more cheaper than the hybrid model.
C. Outsourcing through Multi-sourcing model,
Major advantage of multisourcing models is to reduced dependency on sole suppliers and flexibility to align the products to the end-customer needs.
D. Outsourcing through Global Delivery model:
Although the Global delivery model is advantageous, there are a good number of challenges associated with it. A few of those being lack of project control, the risk of communication gaps between onshore and offshore teams, increased coordination costs and cultural issues.
E. Build-Operate-Transfer (BOT) Model :
The main Advantages of BOT model are to Saves money and increases the profit and diversifying investment for the investors to minimize the risks.
BOT model could be advantageous to the business but the challenges remain. One of the major challenges is the communication gap between the teams. It could be dealt with by building the gap and being clear in communication.
Summary
Outsourcing vs offshoring
Outsourcing definition
Offshoring definition
Outsourcing and offshoring story
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About the speaker - Ameya Damle is an entrepreneur and business consultant. He has years of experience in international sales, corporate sales, leadership and has worked in domains like BPM and offshoring. Ameya has worked with various companies in North America and India. He dedicates this channel to the entrepreneurs and professionals who are continuously willing to learn something.
