Mike Schaeffer's Weblog
Fri, 04 Mar 2005
Outsourcing vs. Offshoring
I'm writing some content for a future post on the offshoring of jobs overseas, but I want to clear something up before it gets posted: Outsourcing and offshoring are two different and orthogonal concepts. This seems to be something that gets misunderstood a great deal, but simply put, outsourcing is the movement of jobs to a different company and offshoring is the movement of jobs to a different country. Either one can be done without the other.

The scenarios that people tend to get upset about (at least in the United States) are the scenarios involving offshoring, the movement of work overseas. Outsourcing, however, does not necessarily imply that the work gets moved to a different country: it's very common for work to be outsourced to another American business employing American workers. An example of this is hiring a Madison Avenue firm to put together an ad campaign. Sure, it'd be possible to develop the talent in house to do this yourself, but there are many advantages in outsourcing the work to a more specialized vendor.

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