Are Outsourcing and Offshoring the same thing ?

From a recent post, I received a few questions that prompted me to generate this post.

Outsourcing and Offshoring are not necessarily the same thing.

Outsourcing is defined at Wikipedia as "the subcontracting of a service to a third party", while Offshoring is defined as "the relocation by a company of a business process from one country to another".

So, a company can choose to outsource something, but choose not to offshore in that process. As an example, very few companies run their own cafeterias - they outsourced that to Guckenheimer, Sodexho and others. But it's pretty hard to offshore your cafeteria (if you actually want to eat there). In the same regard, any US company (for example) with a captive Shared Service Center that's not in the US has chosen to offshore, but not outsource.

In Accounts Payable, both outsourcing and offshoring are methodologies to potentially reduce unit costs and improve processes. But they are not the same thing.