As a freelancer, I’ve seen a number of things that always perplex me. It always amazes that businesspeople still don’t understand the difference between outsourcing and offshoring. These terms are not interchangeable. In a service-based industry, you must always be careful about differences in these terms. Here’s why.
Outsourcing is defined as “The practice of having certain job functions done outside a company instead of having an in-house department or employee handle them; functions can be outsourced to either a company or an individual.” What does this mean?
In short, outsourcing is jobbing out certain functions of your business to a third party within your home country. This is beneficial when you’re not an expert in a particular area, such as marketing. Many companies outsource their marketing to an outside marketing firm so that they can focus on the things they do best instead of trying to become an expert in all fields. Outsourcing is a great option for service-based businesses who need some extra help.
Offshoring is defined as “The moving of various operations of a company to another country for reasons such as lower labor costs or more favorable economic conditions in that other country.” What does this mean?
Offshoring is actually moving part of your business to another country. That’s why we see “Made in China” stamped on most of our goods. Production and labor costs are generally lower in other countries, making it less expensive for corporations to produce goods.
What’s the Difference?
The main difference is location. Outsourcing keeps your business tasks in your home country but offshoring takes them to another country. Many folks often interchange these terms and that’s wrong. They aren’t the same; not even close. Yes, oftentimes, offshoring is less expensive than outsourcing but you could be sacrificing quality.
Why You Shouldn’t Offshore Your Marketing
I recently worked with a marketing company that believed outsourcing and offshoring were the same. It was disastrous for everyone. Almost everything was handled offshore but nothing was being achieved. Social media marketing was something that was being handled offshore. Let me tell you why this isn’t a best practice.
It’s time to realize that the world doesn’t operate like the US operates. Our customs, traditions, language, etc is all vastly different than anywhere else. Offshoring your marketing could be detrimental to your business and your clients because folks in other countries simply don’t understand.
Sometimes, it’s the little things like observing Daylight Savings Time and, sometimes, it’s the big things like not understanding vernacular. Not only is this is an issue, but the time difference is an issue, too. If you offshore to a foreign country, you need to be well aware of the time difference and when your staff will be available.
No one can market your business better than someone who understands where your target market lives. That’s the whole point of marketing. You want to increase sales and brand recognition to your target market. Someone who doesn’t understand the customs, language, and traditions of your target market isn’t going to be successful at marketing your business. Period.
From a business perspective, offshoring is ideal because it’s less expensive. But, if you add up all of the total costs associated with it; having to have the work done several times, taking longer to explain things to the remote worker, etc., you’ll see that, in the end, outsourcing is the least expensive option.
To learn more, or to schedule your free 30 minute consultation, contact me today.