What is the difference between Offshoring and Outsourcing?

Outsourcing and Offshoring are two terms used when it comes to business management. There are some instances whereby there are additional processes, thereby increasing the workload on a company. At this moment, it is most unwise for the company to employ more workers or add to their power.

Therefore, this gives birth to the idea of outsourcing. Hence, outsourcing simply refers to the idea of subcontracting business services to a third-party company, which most times serves as an extension. This third-party company has several potentials of carrying out some activities like design, manufacturing and performing clerical jobs. Considering the other term, offshoring refers to a decision whereby an outsourcing process takes place between two countries, in order to reduce costs. Offshoring has to do more with subcontracting a business process to another country, with the primary aim of reducing costs. For example, a business organization in a country can outsource a business process to another country because the cost of the business process is lesser in the destination country.