What's Your Style for Outsourcing?

Filed in archive Basics on December 1, 2004

In a fast moving field like outsourcing, you can expect that the terminology (aka jargon) will evolve quickly.

Ronil Hira, over at Corante tries to reduce some of the confusion by providing definitions for the various flavors of outsourcing.

On-site Offshore Outsourcing - purchasing services from an offshore outsourcer, which supplies foreign labor at the customer site (on-site). This is a common practice amongst offshore outsourcers such as Tata Consultancy, Infosys, and Accenture. They use H-1B and L-1 guestworker visas to bring foreign workers into the US to deliver services to US customers.

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Insourcing (media, politicians, and some think tanks) - some have argued that 'insourcing' is an analog to 'outsourcing'. However, they have used an odd way of defining it. They define insourcing as anyone in the US who works for an MNC that has a foreign headquarters. See for example, Professor Matthew Slaughter's study for OFII. This is a very odd way to discuss the offshore outsourcing and offshoring phenomenon. The Economic Policy Institute has a good discussion of why, here.

Insourcing (correct usage?) - bringing a product or process, previously purchased from a supplier, in-house. Also known as vertical integration. A good recent example of this was JP Morgan's decision to cancel their $ multi-billion outsourcing contract with IBM to bring the IT work in-house.

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