Outsourcing / Offshoring and Insourcing


Part of the procurement process is to consider whether to outsource, offshore or insource goods or services to achieve the best value and expertise.

Outsourcing may be considered following a skills analysis for example a company may not have the necessary skills or technical expertise for a particular function or a project or the time to carry it out. This could be the production of a product, design of a website or a function such as accounts or for procurement a specific category of spend and by outsourcing this to experts may deliver more value quickly or a better output and reduce recruitment and operational costs of employing experts on a full time or part time basis as they can be employed on a contractor and on an ad-hoc basis for project-based work. Outsourcing certain tasks allows you to scale up or down relative to demand without the permanent overheads.

Offshoring is moving a business process and operating it out of a foreign location for example the manufacturing process where labour is cheaper or expertise higher. There are occasions where you can outsource an activity but you are sold an offshore solution where the work is done in a foreign country such as India, Eastern Europe, China, Vietnam, or Korea who have the infrastructure, technology and lower costs.

Insourcing establishes shared service centres within the organisation and groups together a function such as finance from different locations into one group which offers cost savings, standardised processes, streamlining of projects and reporting and efficiency benefits with resources being relocated to one location.

CIPS Procurement Topics

Related news

CIPS sponsors Young Oil and Gas Supply Chain Professional of the Year Award

Date: Monday, July 11, 2016

Presented earlier this year at the annual Supply Chain Seminar in Aberdeen, hosted jointly by Oil & Gas UK and CIPS.

Continue reading

Growth stabilises at steady pace in December

Date: Wednesday, January 06, 2016

Business activity rises at pace broadly in line with average over second half of 2015 

Continue reading

BIS - Vince Cable: £100m to support domestic supply chains and create new jobs

Date: Friday, April 11, 2014

CIPS responds to today's announcement

Continue reading

Related books

Procurement principles and management

Procurement principles and management

Baily, Farmer, Crocker, Jessop and Jones

Price: £51.99

Member Price: £51.99

Saving: £0.00 (0.00%)

In Stock!

Add to basket

Practical procurement

Practical procurement

RJ Carter & SK Kirby

Price: £24.95

Member Price: £22.45

Saving: £2.50 (10.02%)

In Stock!

Add to basket

Purchasing models handbook, 2nd edition

Purchasing models handbook, 2nd edition

Andrea Reynolds; Ian Thompson

Price: £20.99

Member Price: £18.89

Saving: £2.10 (10.00%)

Out of Stock!

Add to basket

D&B Country Insight Quarterly Risk Report - Zimbabwe

D&B Country Insight Quarterly Risk Report - Zimbabwe

Dun & Bradstreet

Price: £400.00

Member Price: £340.00

Saving: £60.00 (15.00%)

In Stock!

Add to basket

Related concepts

Insourcing

Globalisation is a reality ...You can sit around and wish that something else was taking place or you can take advantage of globalisation, what we call ‘insourcing’...

Find out more

Offshoring

Offshoring is an irreversible trend that is already expanding to include not just routine processes but also the core activities of Western service firms (Jagersma and van Gorp).

Find out more

Outsourcing in Procurement and Supply Chain

The purpose of the concept is to provide an insight into the benefits and drawbacks of outsourcing in procurement. It explores how organisations make outsourcing decisions and offers...

Find out more