Offshoring
Offshoring locates an activity in another country. The activity may remain within the same organisation or be contracted to an independent provider. Location and ownership are therefore separate questions. Decisions can reflect access to skills, customers or capacity as well as costs, and should consider coordination, time zones, resilience, data rules, political exposure and exchange rates.
Worked example
A company moves customer support to its own subsidiary overseas. This is offshoring but does not involve outsourcing to an independent supplier. Using a domestic outside support company would reverse those classifications.
Common mistake
Do not use offshoring as a synonym for outsourcing or assume that lower wage rates establish lower overall cost. Include service, control and transition effects.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | BT | Direct | September 2026–June 2027 |
| FIA | FBT | Direct | September 2026–June 2027 |