What is the difference between outsourcing and offshoring?
This is pretty easy. Outsourcing is passing of some part of the work or even complete project to the external third party organization, while offshoring is just an outsourcing but to the remote country.
So, offshoring is a kind of outsourcing with the notion of the distance between the client and the contractor organization. In general, there are three types of outsourcing according to the physical distance between two parties.
Onshore - outsourcing of some of the business process to the contractor located in the same country with the client.
Nearshore - it is an outsourcing to a neighboring country or to a not very distant location or within the same region with the time difference not more than two hours. For example, when organization located in England passes some work to the third party contractor located in France it’s a nearshore outsourcing.
Offshore - it’s and outsourcing to the very distant location with the significant difference in time and all the related pros and cons of such choice like lower price and culture difference. A very standard example is an outsourcing from US to India.