Productivity in Offshoring and Outsourcing

Outsourcing and offshoring are terms that are often confused with regards to meaning and usage. While closely linked, their meanings are not quite the same. Outsourcing is the delegation of tasks and/or processes to an external outfit, whether an individual or another company - not necessarily a foreign one. Offshoring is the shifting of tasks to a company in another country. In that sense, offshorers may also be outsourcers, but not all outsourcers offshore.

These two concepts are not new, and have actually been around for a very long time. It has gotten quite a name for itself in the business world starting in the 1980s when the larger companies started offshoring and outsourcing their production. It continued to rise until the 1990s when in declined somewhat, but the dawn of the new century has given rise to a new generation of companies that are using outsourcing and offshoring as major tools in their business arsenal. You may call the present times as the outsourcing and offshoring age as more and more companies are becoming aware of this practice and are opting for it. One of the primary reasons for adopting outsourcing and/or offshoring is the reported rise in productivity in the companies that do so. In the business world, productivity means profit, and what sensible businessman will shy away from it? < Outsourcing >

This increase in productivity attributed to both offshoring and outsourcing comes from the fact that less money and resources are spent for the same tasks compared to what was previously done. This is attributed to lower overhead costs with regard to things such as utilities (which the outsourcing company is likely to shoulder rather than the client) and the task of finding qualified people for the job. Outsourcing and offshoring have also been easier due to the major advancements in communication technologies. Monitoring progress and productivity of your outsourcers has never been this easy.

In some ways, outsourcing and offshoring have been easier as well. Some of the companies that either offshore or outsource have a great global presence, and finding employees willing to work for these companies is never a problem. The biggest ones attract the best and brightest of the lot. This may also be a reason why companies who want to have a bigger international presence opt to offshore in order to find their footing. < Outsourcing >

There are still many arguments as to the benefits of outsourcing and offshoring, but no one can doubt what it brings to the companies that use this model, and the growth that these companies have experienced over the years. Because of this, it is more than likely that many other companies will try and replicate the success of these companies and try their hand at outsourcing as well. < Outsourcing >

By Jeanne Burns