Which Of The Following Best Describes Outsourcing?

Outsourcing is a term that is commonly used to refer to a company’s relocation of certain business processes or operations to a third-party service provider. It is a strategy that is often used to reduce labor costs, make better use of resources, and increase access to a wide range of specialized, talented individuals across the globe. The following is a breakdown of the many types of outsourcing available to businesses.

Offshore Outsourcing

Offshore outsourcing is the practice of contracting out business processes and operations to a service provider that is located outside of the company’s home country. This type of outsourcing involves sending work overseas in order to reduce costs associated with labor, materials, and other expenses. Companies frequently use offshore outsourcing to take advantage of lower wages and better communication infrastructure overseas.

Onshore Outsourcing

Onshore outsourcing is the transfer of business processes and operations to a third-party service provider located within the same country as the company. This type of outsourcing is used to save companies money on labor costs and maximize efficiency by taking advantage of local resources and talent. This is a popular choice for companies that require a great deal of customization in their services and products.

Nearshore Outsourcing

Nearshore outsourcing is similar to offshore outsourcing, except that the third-party service provider is located in a country that is geographically close to the company. This type of outsourcing is attractive for businesses that need to maintain high levels of communication with their service providers. It also enables companies to benefit from the cost savings associated with overseas outsourcing while still enjoying faster transit times and better control over the production process.


Multi-sourcing is a type of outsourcing that involves contracting out work to different service providers located in multiple countries. This strategy often results in significant cost savings, as companies are able to benefit from the lower cost of labor and specialized skills available in different locations. Multi-sourcing also allows for a higher degree of control, as the company can easily switch service providers if their needs change or if the service provider fails to meet expectations.


Outsourcing is a valuable and cost-effective strategy that can help companies achieve improved efficiency and lower costs. Depending on the company’s needs, these strategies can range from offshore outsourcing to multi-sourcing. By taking the time to evaluate the different types of outsourcing available, companies can select the right strategy to ensure their success.

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