Offshoring places a business activity or production process in another country, whether the overseas operation is owned by the buyer or performed by an external supplier. Ownership distinguishes captive offshoring from outsourced supply.
How Offshoring works in a sourcing process
Define the activity being moved, the operating entity, control model, data or tooling ownership and the handoffs that cross borders.
| Area | What to record |
|---|---|
| Decision | Define the activity being moved, the operating entity, control model, data or tooling ownership and the handoffs that cross borders. |
| Evidence | Review labor and operating assumptions, regulatory obligations, continuity, intellectual property, currency exposure and exit costs. |
| Watch point | Offshoring describes location. Outsourcing describes who performs the work. A company can offshore without outsourcing, or outsource to a domestic provider. |
What buyers should verify
Review labor and operating assumptions, regulatory obligations, continuity, intellectual property, currency exposure and exit costs.
Offshoring describes location. Outsourcing describes who performs the work. A company can offshore without outsourcing, or outsource to a domestic provider.
