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!