Outsourcing has attracted increased
attention due to the emergence of offshore destinations such as
India, China and Eastern Europe and the alleged threats these
destinations provide to the jobs in the US and Europe. However,
outsourcing occurs in various other modes such as on-shoring,
near-shoring and home-sourcing. These modes have been described in
Table 1 below.
Table 1: Modes of Outsourcing
|
Outsourcing Mode
|
Description
|
Example
|
|
On-shoring
|
Outsourcing to a vendor that is located at a destination domestic
to the customer
|
Burger King Corporation, a US based chain of restaurants, lost its
laboratories in the havoc created by Hurricane Andrew in 1992. The
company was hence forced to outsource its quality assurance
functions to other companies in the US. However, even after
rebuilding its laboratories, Burger
King still on-shores its quality assurance functions as it
allows the company to make productive use of its internal
resources.
|
|
Offshoring
|
Outsourcing to a vendor that is located in a far-off country
(Refer to the report on Outsourcing to India for more details)
|
Numerous UK-based BPO companies such as Capco,
Ventura, Capita Group and Vertex are now providing offshored
services to their clients through their operations in India.
|
|
Near-shoring
|
Outsourcing to vendor in a nearby country
|
Williams Lea, an information management supplier based in the UK
near-shored the development of its computerized purchasing system
to Crimson
Wing, commercial systems solution provider in Malta.
|
|
Home-sourcing
|
Outsourcing to workers who work from home
|
Rural Sourcing Inc. is an outsourcing firm based in the US
offering IT
services through home-sourcing. Rural Sourcing provides
superior quality services at lower cost by hiring employees living
in rural areas of Arkansas, North Carolina, Missouri and Illinois.
|
Companies are also resorting to the
option of multi-sourcing
where a combination of offshoring, on-shoring, near-shoring and
home-shoring is used. For example, Satyam Computer Services provides
its customers a global delivery mode called Rightsourcing
which is a combination of onsite, offshore, on-shore or near-shore
delivery capabilities. This model enables Satyam’s clients
harness additional time and cost advantage as compared to sourcing
via a single mode.
