15 February 2010

Do we need a new terminology in offshore outsourcing?

About Hugo Messer

Hugo Messer is a Dutch entrepreneur, distributed agile team specialist, and author. He is the founder and owner of Bridge Global, a software services provider, and ekipa.co., an agile coaching agency. He has been building and managing teams around the world for the past several years. His passion is to enable people that are spread across cultures, geography and time zones to cooperate. Whether it’s offshoring or nearshoring, he knows what it takes to make global cooperation work.

6 thoughts on “Do we need a new terminology in offshore outsourcing?
  1. Instead of terms like “distance” or “remote” or “afstands” … how about building from words about bringing together like “joint” or “aggregate” or “gezamenlijk”.

  2. Do we really need new terminology?
    – Offshoring
    – Offshore outsourcing
    – Nearshoring
    – Nearshore outsourcing
    – Captive center
    – Outsourcing

    I think there is a distinct difference between some of the used concepts. Some universities, and I am following that path, use offshoring (the question is whether the correct word is offshoring or off shoring) as a general concept for internationalization at large. In that case it includes import, export, licensing, (both ways) leasing, all kind of partnerships and alliances, including joint venture, etc .
    That means that according to that understanding offshoring includes outsourcing and insourcing.
    The word insourcing is often used when work is outsourced to another member-company in the same group; an transaction between companies that are owned by the same group.
    Offshore-outsourcing therefore means outsourcing in another country. This in contradiction to having work done by another party in one’s own country which is also outsourcing, but not offshoring-outsourcing. Should we now introduce the word inshoring-outsorcing in order to differentiate between offshoring-outsourcing?
    Near shoring: what is the difference between nearshoring and offshoring? When does nearshoring become offshoring? After 150 KM? 500 km? 1500km. If we use the word nearshoring we should also use the word farshoring. And drop the word offshoring? As longs as offshoring and outsourcing is not mixed up, the problem is controllable?
    Captive offshoring describes an alliance whereby ownership is in hands of the oversea’s initiator. The multinationals such as Shell, Unilever, Genral Motors and the large banks go for this type of offshoring. According to my perception, captive offshoring only gives information on the shareholding , not really on the activity.
    I wonder whether it is necessary to introduce a new vocabulary. It may add to the frustration that is there already. Wouldn’t it be better that we all try to use the right words in the correct setting?
    May I add something to increase the frustration somewhat? What about free zones and maquiladoras? They may, but do not have to be an offshore variety. It can, but does not have to be a captive offshoring activity.
    Instead of offering a solution for a problem, I rather contribute to the frustration so that somebody else gets a chance to put his finger on the weakness.

  3. Thanks for your replies.
    @ Phil: I like the direction ‘joint’ a lot, because in the end, the success of the whole operation depends on joint efforts. Only thing is how to get that ‘direction’ into a term describing the industry clearly?
    @ Nick: I hope that you will get an insight one of these days and share the term that I am looking for?

  4. Pingback: New terminology in offshore outsourcing - Part 2 | Bridge-Blog

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