Outsourcing

Outsourcing is the act of a company relying on an external provider for a business process that otherwise would be internal. Generally, it involves an agreement in which one company hires another company to be responsible for a planned or existing activity which otherwise would be carried out internally,^[1][2] a.k.a. in-house,^[3]

Outsourcing sometimes involves transferring employees and assets from one firm to another.

The term outsourcing, which came from the phrase outside resourcing, originated no later than 1981 at a time when industrial jobs in the United States were being moved overseas, contributing to the economic and cultural collapse of small, industrial towns.^[4][5][6]

The concept, which The Economist says has "made its presence felt since the time of the Second World War",^[7] often involves the contracting out of a business process (e.g., payroll processing, claims processing), operational, and/or non-core functions, such as manufacturing, facility management, call center/call center support.

The practice of handing over control of public services to private enterprises (privatization), even if conducted on a limited, short-term basis,^[8] may also be described as outsourcing.^[9]

Outsourcing includes both foreign and domestic contracting,^[10] and therefore should not be confused with offshoring which is relocating a business process to a another country but does not imply or preclude another company.^[11] In practice, the concepts can be intertwined, i.e. offshore outsourcing, and can be individually or jointly, partially or completely reversed,^[12] as described by terms such as reshoring, inshoring, and insourcing.