Offshoring is the process of shifting one or more business processes to another company that is geographically far from where the client company is located. A US-based firm outsources work to a service provider in the Philippines or India. The process of shifting one or more business processes to a third party service provider is called outsourcing. On the part of client companies, outsourcing enables them to reduce labor and operational costs and gain access to highly skilled talent that's readily available in other locations.