Faster and Cheaper Engineering Services Outsourcing and Offshoring Solutions
The two terms offshoring and outsourcing are used interchangeably in the business world. However, contrary to common perception these two terms are not at all synonyms. They might be similar in concept but they differ in technicalities. Offshoring and outsourcing both deal with the concept of getting work done by specialists. In outsourcing, the work is contracted out to an external organization, a third party, whereas in offshoring the work is done in a different country. Let us look at the two terms in detail.
Outsourcing
It is the process of contracting out of certain activities, or an entire business function or an entire project to an external service provider. When companies grew larger, they were not able to focus on activities that required specialized skills. Hence, they decided to outsource activities to external providers mainly on the ground that external providers possessed specialized skills to complete tasks not only efficiently but also swiftly.
Offshoring
It is the process of handing over some particular function of a company from one country to another country. Some companies establish subsidiaries in different countries so that they can take advantage of the global talent pool. Therefore, offshoring can be defined as the process of assigning or contracting out work to a third party or a subsidiary and getting the work done in a different country.
Outsourcing and offshoring can be considered as byproducts of globalization. Globalization led to the opening up of new avenues for companies to explore and exploit. This coupled with technological advancements and infrastructure developments augmented the number of outsourcing and offshoring projects around the world. Not only multinational corporations (MNCs) but also small and medium business enterprises (SMBs) have joined the bandwagon. If on one hand it helped MNCs to hire the services of skilled experts at low cost, on the other hand it provided an opportunity for SMBs to compete with the large businesses while cutting down on their expenses.
Today there are several service providers who have made a niche for themselves in the engineering services outsourcing space. MNCs and SMBs can now outsource or offshore engineering services requirements to these service providers and get solutions for their engineering requirements ranging from concept design, detailing and analysis, to product realization solutions in aerospace, civil structures, power generation, industrial products, oil & gas and transportation. With their services and solutions, companies can not only benefit from a systematic approach and manage resources at cheaper costs but also enhance profitability and transform their companies into a global force.
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