Difference between Outsourcing, Offshoring & Insourcing
12/7/2005 by ITtoolbox Popular Q&A Team
ITtoolbox as adapted from IT-Outsourcing-SP discussion group
What is the difference between outsourcing, offshore and insourcing?
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Adapted from a response by Michael on 12/6/2005
Firstly, Outsourcing is not strictly IT. Any function of an organization that is executed by non-employees is essentially an Outsourced task.
Insourcing is the use of external resources (not employees of the organization) to accomplish some function, BUT they are predominately carrying out the function at the client's site. So the function is "sourced", but not "out" sourced. These resources are also typically managed more closely by the client directly with little management involvement from the supplier.
Finally, we have another concept, and that is Offshoring. This is simply a subset of Outsourcing which is generally understood to involve a country in which costs remain lower than the client's country of operations.
One final point, while most Offshoring situations are indeed an example of Outsourcing, for those companies (HP for example) who now own their offshore operations and have folded them into the company, the line gets blurred. In other words, Offshoring is not always Outsourcing anymore.
Disclaimer: Contents are not reviewed for correctness and are not endorsed or recommended by Toolbox.com or any vendor.
Popular Q&A contents include summarized information from Vendor Management discussion unless otherwise noted.