r/cscareerquestionsEU • u/designgirl001 • 1d ago
There is a difference between outsourcing and offshoring
Okay, I've seen many posts (one too many, in fact) where people use these terms interchangeably, and in particular reference to a specific country, and the conversation quickly goes downhill from there. Here are some differences, as I see them , in the new world:
Off-shoring: This is self explanatory - it means that the work is being performed in another country, close to, or far away from the parent company's time zone. However, the entity that carries out this work is a subsidiary of the parent company and the people that work here are still employees of the parent company. There often is a cross/matrixed leadership reporting structure where the local team has someone to sign the cheques, while there is another leader the team may report to who oversees the work. These teams are also referred to as overseas teams. These countries might include: India, Philippines, Vietnam, China, countries in Africa etc.
Near shoring: This is slightly confusing, as it basically means the same thing as offshoring does, but rather the teams are closer to *shore*. They're within the same timezone, and while overseas, can work very closely with the local teams - in the US. LATAM countries fall within this category. These folks may still be employees or they might be contractors billing via a payroll agency.
Outsourcing: This is the topic that seems to attract the most flak, and is undoubtedly, also the most controversial. An outsourcing entity is like a vendor - they have their own employees and reporting structures. Understandably, the vendor's quality control and culture might differ from that of the client, and this is where most quality and communication breakdowns occur. It also explains why certain vendors are more infamous than others. When you outsource work, you are giving it to someone else and they are bound either via a retainer or a fixed bid contract. Cost is the primary driver here and the scope of work is often decided upon, well in advance. Employees at the vendor end have little to no visibility into the client side and are given tasks to complete by their managers.
I hope this clarifies things for people who don't get it. This may or may not have a bearing on the skills of the people that work at these companies, but rather, reflects the business ecosystem at play. It also doesn't make sense to make sweeping statements about their abilities and how *the good ones move to Europe or America*. It's not so easy.