Key Definitions

Typically, customers consider outsourcing to a foreign location, because their competition is already doing it.  They want to remain competitive, because they know that delaying a project due to budget constraints, can kill business performance.  For example, a common business strategy is to launch a product ahead of your competition to gain market penetration and dominance.  In the case of IT initiatives, often cases budget, business strategy and business needs is a delicate balancing act.  Projects that are sometimes delayed or postponed indefinitely due to budget can be re-invigorated using a near-shore model that provides budget relief, but allows your business strategy to stay its course.

Before any options are considered, it is best to become familiar with some basic concepts.  Assuming one plans to outsource, the next question is - should I use a local firm?  Or, should I expland my search horizon to off-shore or near-shore geographies?

Key Definitions:

1. On-shore outsourcing:  usage of a provider in one's home country or region, typically a high skill-set, high cost country.  (Any tier 1 country such as the United States or United Kingdom).
2. Near-shore outsourcing:  usage of a provider in different country, but within the same region, thus similar time zones and smaller cultural and language variances.
3. Off-shore outsourcing:  usage of a provider in a different country, in a distant region, thus disparate time zones and larger cultural and language variances.

In each case above, the firm has chosen to use outside resources, to reduce costs and gain some form of business advantage.