The Precision of Terms – The Service Delivery Family

In a prior blog, I
outlined a few of the phrases and terms that people use to refer to outsourcing
and offshoring from a strategic context. Today, I want to dig into the more
specific words that are used to discuss outsourcing and offshoring.

Here we go …

 

 

 

 

  • Outsourcing: the process of identifying, acquiring and managing the receipt
    of Sourced Services from an external Service Provider
  • Insourcing: the process of identifying, acquiring and managing the receipt
    of Sourced Services from an internal Service Provider including bringing
    services back in-house, establishing and realigning Shared Service groups and
    Captive Centers

Operating
Structure Terms

  • Outsourced: Sourced Services are delivered by an external Service Provider
  • Insourced: Sourced Services are delivered by an internal Service Provider
    including functional groups, Shared Service groups and Captive Centers
  • Shared
    Services
    : one business unit delivers and/or manages the delivery of Sourced
    Services to multiple business units within the same enterprise
  • Captive
    Centers
    : a service delivery entity that is wholly owned and operated by
    the organization or organizational group to which the Sourced Services are
    delivered, typically located at an offshore location and operated as a separate
    legal entity
  • Joint
    Venture
    : a service delivery entity that is
    jointly owned by two or more parties, at least one of which is not the entity
    to which the Sourced Services are delivered
  • Build-Operate-Transfer: external Service Provider
    owned entity engaged with the expressed intent and/or option of transitioning
    the delivery mechanism (e.g., people, capital, processes, IP) of Sourced
    Services to an internal Service Provider at some future time

Terms that
define from where service is delivered

  • Global
    Service Delivery / Global Sourcing
    : a Service
    Delivery Strategy that uses multiple geographic locations for service delivery
    where such locations may be different from the location of the Service Buyer(s)
    and are selected based on service requirements, skills, costs, infrastructure,
    etc.
  • Onshore: a final delivery state where the service delivery location is
    within the same geographic jurisdiction as the Service Buyer
  • Nearshore: a final delivery state where the service delivery location is in
    a different geographic location (e.g., country) of close proximity to the
    Service Buyer
  • Offshore: a final delivery state where the service delivery location is in
    a different geographic location at a distance to the Service Buyer, most
    commonly a different continent
  • Offshoring: the process of transitioning service delivery from the location
    of the Service Buyer to a different geography
  • Onshoring: the process of transitioning service delivery to a location within
    the same geography as the Service Buyer
  • Onsite: the process of delivering services via co-resident resources
    relative to the Service Users

Other terms

  • Multisourcing: A Service
    Provider Strategy with a common Service Management & Governance Operating
    Model to manage the receipt of Sourced Services that require cooperation,
    regular interaction, and/or interoperability from multiple Service Providers
  • Multifunction
    sourcing
    : A Sourcing Strategy that involves simultaneously acquiring
    Sourced Services for multiple independent functional domains

Quite a list! I hope you find this useful – and we’d
welcome your thoughts on any variances, nuances or gaps!