Outsourcing

Outsourcing

Outsourcing is a business practice in which a company contracts with an external party to perform services or create goods that were traditionally performed in-house by the company's own employees and staff. It involves the transfer of the management and/or day-to-day execution of an entire business function to an external service provider. The client organization and the supplier enter into a contractual agreement that defines the transferred services. Under the agreement, the supplier acquires the means of production in the form of a transfer of people, assets, and other resources from the client. The client agrees to procure the services from the supplier for the term of the contract. Business segments typically outsourced include information technology, human resources, facilities, real estate management, and accounting. Many companies also outsource customer support and call center functions like telemarketing, CAD drafting, customer service, market research, manufacturing, designing, web development, content writing, ghostwriting, and engineering. Outsourcing business functions is sometimes called contracting out or business process outsourcing. Outsourcing can help businesses reduce labor costs significantly while focusing on their core operations and competencies.

outsource, offshoring, business process outsourcing, BPO

— Robert Anderson