[PDF] outsourcing terminology

What is outsourcing and why is it done?

Outsourcing is the strategy of delegating in-house work or parts of business processes to external resources, including individuals and organizations, to achieve better outcomes. It lets a company concentrate on its core business operations while allocating non-core tasks to a contractor for a lower fee.

What is the difference between outsourcing and offshoring?

Offshoring also involves turning over certain activities to an outside supplier – but the supplier is abroad. Outsourcing might include either a domestic or foreign supplier. Outsourcing is a strategy by which a company farms out major functions to specialist service providers. These providers eventually become valued business partners.

What are the pros and cons of outsourcing?

Outsourcing has lesser expenses compared to having to hire permanent full-time staff. It also saves you some time on your recruitment process and onboarding. Outsourcing providers have a pool of industry experts with diverse experiences from having to work with clients in different industries.

What are some examples of outsourcing?

Outsourcing is where a company hires an external firm to conduct certain aspects of its business. In other words, one business hires another to operate part of its operations. For example, Apple outsources the majority of its production to Foxconn which assembles many of its products such as the iPhone.