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Offshoring vs. Outsourcing: The Main Differences

Offshoring vs. outsourcing suggests a strong separation between these two business process outsourcing approaches. However, despite what this comparison would suggest, outsourcing and offshoring can very strongly overlap. Rather, it is their basic philosophies that distinguishes the two. For clean separation, it makes sense to use nearshoring as a possible third approach. Let me explain these differences with the example of software development.

Nearshoring vs. offshoring vs. outsourcing

In nearshore software development companies bring in specific software developers into the company without permanently hiring them. In contrast to other models, nearshore software development refers to software developers who are in the same time zone as you. This facilitates communication and coordination because both the client and the nearshore software development provider share the same working hours. In addition to a greater cultural proximity, the geography also plays an important role, since it is easier to bring a nearshore software developer into the company for a visit if necessary.

Offshore software development uses developers from distant countries, and India in particular plays a prominent role here. The coordination is somewhat more complicated, however at the same time offshoring offers the largest savings potential. India has positioned itself as an important IT nation and offers more than 55% of all outsourcing services worldwide. The combination of excellently trained software developers, English as a working language and low salaries which are almost unrivalled makes it hard for other countries to compete with India when it comes to IT offshoring.

Outsourcing is also an onshore strategy, which is feasible in your own country, nearshore or even offshore. Naturally, the IT sector is more dynamic in terms of outsourcing than other sectors of the economy. The offshore realisation of projects through suitable providers, or building your own offshore branch is already common practice.

It’s no surprise that even large IT corporations are taking advantage of offshoring-outsourcing and have built up their own large locations in India over the years. IBM employs more than 150,000 Indian employees, Accenture 80,000 and even the software giant Oracle is well represented with 80,000 employees.

From offshoring vs. outsourcing to offshore-outsourcing

With outsourcing4work you can easily realise important IT projects in India with offshore-outsourcing and save huge amounts of money. Creating websites and online shops, app development and SAP or MySQL database development are just a few examples of offshore IT projects possible with us.

outsourcing4work is not purely a service provider, but it takes on the responsibility for the success of your project as a European contract partner. You can hire temporary employees, complete a project at a fixed price or hire an entire team who will work exclusively for you, all through us.