In a prior blog, I
outlined a few of the phrases and terms that people use to refer to outsourcing
and offshoring from a strategic context. Today, I want to dig into the more
specific words that are used to discuss outsourcing and offshoring.
Here we go...
- Outsourcing: the process of identifying, acquiring and managing the receipt of Sourced Services from an external Service Provider
- Insourcing: the process of identifying, acquiring and managing the receipt of Sourced Services from an internal Service Provider including bringing services back in-house, establishing and realigning Shared Service groups and Captive Centers
Operating Structure Terms
- Outsourced: Sourced Services are delivered by an external Service Provider
- Insourced: Sourced Services are delivered by an internal Service Provider including functional groups, Shared Service groups and Captive Centers
- Shared Services: one business unit delivers and/or manages the delivery of Sourced Services to multiple business units within the same enterprise
- Captive Centers: a service delivery entity that is wholly owned and operated by the organization or organizational group to which the Sourced Services are delivered, typically located at an offshore location and operated as a separate legal entity
- Joint Venture: a service delivery entity that is jointly owned by two or more parties, at least one of which is not the entity to which the Sourced Services are delivered
- Build-Operate-Transfer: external Service Provider owned entity engaged with the expressed intent and/or option of transitioning the delivery mechanism (e.g., people, capital, processes, IP) of Sourced Services to an internal Service Provider at some future time
Terms that define from where service is delivered
- Global Service Delivery / Global Sourcing: a Service Delivery Strategy that uses multiple geographic locations for service delivery where such locations may be different from the location of the Service Buyer(s) and are selected based on service requirements, skills, costs, infrastructure, etc.
- Onshore: a final delivery state where the service delivery location is within the same geographic jurisdiction as the Service Buyer
