--- title: "Offshoring vs Outsourcing: The Difference Explained | Azendo" description: "Offshoring vs outsourcing: one decides where the work happens, the other who is accountable for it. How they combine, and where a managed offshore team fits." url: "https://azendo.co/blog/engagement-models/offshoring-vs-outsourcing/" --- 1. [Home](https://azendo.co/) 2. [Newsroom](https://azendo.co/newsroom/) 3. [Engagement models](https://azendo.co/blog/engagement-models/) 4. Offshoring vs outsourcing # Offshoring vs outsourcing: two different decisions, explained. Offshoring and outsourcing are often used as if they mean the same thing. They answer different questions. Offshoring is about where the work happens. Outsourcing is about who is responsible for it. You can do either one without the other, and knowing which you're choosing makes every vendor conversation clearer. By [Mikkel Schmidt](https://azendo.co/about/mikkel-schmidt/) Updated 24 September 2026 Offshoring is a question of location. Outsourcing is a question of responsibility. ## Offshoring vs outsourcing at a glance Offshoring moves work to another country. Outsourcing hands work to another company. The first is a decision about geography, and the second is a decision about responsibility. Most confusion in this area comes from treating them as one choice. ## What offshoring means Offshoring means moving work to another country. A company that opens its own development office in Poland has offshored, and nothing has been outsourced: the people are still its employees and the accountability stays in-house. Offshoring decisions are about cost, time zones and access to talent. When the decision is only about location and you still manage the people, it’s usually described as [offshore staffing](https://azendo.co/blog/engagement-models/offshore-staffing/). ## What outsourcing means Outsourcing means handing a function to an external provider who becomes responsible for delivering it. Where the provider sits doesn’t matter. A London company using a Manchester agency has outsourced without offshoring. Outsourcing decisions are about accountability. The model most often mixed up with outsourcing is [staff augmentation](https://azendo.co/blog/engagement-models/staff-augmentation/), where the provider supplies people and you stay accountable for the work. ## How offshoring and outsourcing combine Scroll the table sideways to see every column. | Where | Kept in-house | Outsourced | | -------- | ---------------------------------------- | --------------------------------------- | | Domestic | Your own local team | A local agency or partner | | Offshore | Your own office or captive centre abroad | A managed offshore team, such as Azendo | All four combinations are valid. Problems start when a company believes it has chosen one and has in fact chosen another, and only finds out when something goes wrong and it’s unclear whose problem it is. ## What business process outsourcing means Business process outsourcing applies outsourcing to a whole business function, such as payroll, customer support or finance operations. It’s a type of outsourcing that’s often offshored, which is why the three terms end up in the same sentence so often. ## How to answer both questions To settle offshoring vs outsourcing, ask the two questions one at a time. Do you want the work done in a lower-cost location or a different time zone? That’s the offshoring decision. Do you want someone else accountable for delivering it? That’s the outsourcing decision. The answers are independent of each other. At Azendo, your team works from our offices in Thailand, which is the offshoring part, and [accountability for delivery sits with us](https://azendo.co/how-it-works/), which is the outsourcing part. It’s a managed offshore team, set up through [software development outsourcing](https://azendo.co/services/software-development-outsourcing/) under one agreement. Many companies choose it to hire remote developers without opening an office abroad. ## Where the two decisions land in practice. Offshoring answers where the work happens. Outsourcing answers who is accountable for it. These views cover the second question. What stands behind the person doing the work Both models put a specialist on your roadmap. A managed team also puts a development programme behind them, which is what keeps them with you, and improving, in year three. Offshore staffing Your teamdirects the work Assigned specialist Behind the specialist Employment and payroll. Development, coaching, reviews and retention are usually left to you. Your side carries * Priorities * Scope * Technical decisions * Acceptance * Sprint planning * Quality gates * Performance reviews * Training * Retention * Continuity Azendo managed service Your teamsets the roadmap, reviews output Azendo service delivery manageraccountable for what ships Assigned specialist Talent Success programme, around every specialist * Talent Success and Workplace Experience managers Two per specialist * Well-being check-in Every 2 weeks * Coaching and development Monthly, in-house * Development plan Reviewed monthly * Client delivery score Every Friday * 360° performance review Quarterly * Growth track and promotion readiness Live skill profile * AI certification Before assignment 3.3 years Average time a specialist stays with Azendo, which keeps your product knowledge in the team Your side carries * Priorities * Scope * Technical decisions * Acceptance __What stands behind an assigned specialist in each model__ | Element | Offshore staffing | Azendo managed service | | ------------------------------------------------ | --------------------------- | -------------------------------------------------------------- | | Who directs the work | Your team | An Azendo service delivery manager, accountable for what ships | | Talent Success and Workplace Experience managers | Not part of the arrangement | Two per specialist | | Well-being check-in | Not part of the arrangement | Every 2 weeks | | Coaching and development | Not part of the arrangement | Monthly, in-house | | Development plan | Not part of the arrangement | Reviewed monthly | | Client delivery score | Not part of the arrangement | Every Friday | | 360° performance review | Not part of the arrangement | Quarterly | | Growth track and promotion readiness | Not part of the arrangement | Live skill profile | | AI certification | Not part of the arrangement | Before assignment | | Average specialist retention | Not published | 3.3 years | What the monthly fee covers Both models handle employment. A managed team also handles delivery, and that is what the difference in hourly rate pays for. | Covered by the provider | Offshore staffing | Azendo managed service | | ----------------------------------------- | ------------------ | ---------------------- | | Recruitment and selection | Yes | Yes | | Employment, payroll and local compliance | Yes | Yes | | Office, equipment and network | Yes | Yes | | Sprint planning and day-to-day management | No, stays with you | Yes | | Quality gates and code review standards | No, stays with you | Yes | | Training and development | No, stays with you | Yes | | Performance management | No, stays with you | Yes | | Knowledge retained if a specialist leaves | No, stays with you | Yes | | Accountability for what ships | No, stays with you | Yes | | Total covered | 3 of 9 | 9 of 9 | ## Questions people ask. Is offshoring the same as outsourcing? No. Offshoring is about where the work happens. Outsourcing is about who is accountable for it. A company can offshore to its own office abroad without outsourcing anything. Can you outsource without offshoring? Yes. Using an agency in your own country is outsourcing with no offshoring involved. Is business process outsourcing the same as offshoring? No. BPO means outsourcing a whole business function. It's often offshored, but the two terms describe different things. Which is cheaper? Offshoring usually lowers the cost per hour. Outsourcing can lower total cost too, depending on how much management work it takes off your side. ## Tell us what the roadmap needs and we will tell you what it takes. A service delivery manager replies with the disciplines we would assign, the monthly capacity and what the first month looks like. [Get in touch](https://azendo.co/get-in-touch/) [How it works](https://azendo.co/how-it-works/) ## Not sure which engagement model fits your roadmap.