It wasn't all that long ago when outsourcing certain aspects of your business like basic software development or support services to save money was commonplace. Now, companies are discovering that sending work abroad may not be as cost-effective as once thought.

Enterpreneur Paul Spiegelman says, "Offshoring promises big savings but doesn't always deliver. As more companies' offshoring stories come in, many are not finding the savings they expected. Factors such as rising crude prices are affecting the cost to ship manufactured goods back to the U.S., and rising labor costs are mitigating work force savings.

"A study by the AT Kearny consultancy sheds light on this. It found that 34 percent of the companies it surveyed with operations offshore didn't earn the savings they expected. It also found that companies that moved operations overseas purely for savings fared worse than companies whose key motivation was improving performance. Even then, 60 percent of companies didn't reach their operational performance targets."

So what are some valid alternatives to outsourcing? One option that's gaining traction is "rural sourcing," or sending work to regions in the U.S. where salaries and operating expenses are lower. It's an option that saves or creates jobs in rural areas across America, rather than shipping work -- and money -- overseas.

Shared services is another viable alternative to outsourcing. HRO Today describes it this way: "Simply put, there is a central processing unit to take responsibility for the delivery of services for each of the units throughout the organization. The function may be payroll, reference checking, benefits administration, or recruiting. Each unit gets assistance from a “central” unit that offers services under its umbrella.

"For instance, the accounting units of three separate areas are expected to utilize the services of the recruiting group assigned to them; for that access, those units are charged a fee. The unit in turn has a matrixed relationship—it reports to the central HR unit, but costs are charged to each business unit."

A third option to outsourcing is "insourcing," or contracting in regular freelancers to work on-site. This alternative helps keep staffing expenses to a minimum while allowing close supervision and collaboration among team members.

"In other words, a company can 'outsource' work to another company that is working onsite and, often, directly with its employees. And that’s really the main difference between 'outsourcing' and 'insourcing.' It’s subtle but it’s important," notes one insourcing vendor.

Outsourcing long- or short-term projects or services may be the best option for some startups. It's not the only solution, however, and it's an issue worth exploring to find the right choice for your company.