Outsourcing is an agreement in which one company hires another company to be responsible for a planned or existing activity that is or could be done internally,[1][2]and 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.[3][4][5] The concept, which The Economist says "made its presence felt since the time of the Second World War,"[6] often involves the contracting of a business process (e.g., payroll processing, claims processing), operational, and/or non-core functions, such as manufacturing, facility management, call center/call centre support).

Outsourcing is also the practice of handing over control of public services to private enterprises.[7]

Outsourcing includes both foreign and domestic contracting,[8] and sometimes includes offshoring (relocating a business function to a distant country)[9] or nearshoring (transferring a business process to a nearby country).

Offshoring and outsourcing are not mutually inclusive: there can be one without the other. They can be intertwined (Offshore outsourcing), and can be individually or jointly, partially or completely reversed,[10] involving terms such as reshoring, inshoring, and insourcing.


  • Offshoring is moving the work to a distant country. If the distant workplace is a foreign subsidiary/owned by the company, then the offshore operation is a captive,[11] sometimes referred to as in-house offshore.[12]
  • Insourcing entails bringing processes handled by third-party firms in-house, and is sometimes accomplished via vertical integration.
  • Offshore outsourcing is the practice of hiring an external organization to perform some business functions ("Outsourcing") in a country other than the one where the products or services are actually performed, developed or manufactured ("Offshore").[13]
  • Farmshoring refers to outsourcing to USA rural-located companies.[14]
  • Homeshoring (also known as Homesourcing) is a form of IT-enabled "transfer of service industry employment from offices to home-based ... with appropriate telephone and Internet facilities."[15].[16] These telecommuting positions may be customer-facing or back-office,[17] and the workers may be employees or independent contractors.
  • An Intermediary is when a business provides a contract service to another organization while contracting out that same service.[18][19]


Some of the acronyms related to BPO (Business Process Outsourcing are:

Other Languages
العربية: تعهيد
беларуская: Аўтсорсінг
беларуская (тарашкевіца)‎: Аўтсорсінг
български: Аутсорсинг
brezhoneg: Outsourcing
čeština: Outsourcing
Deutsch: Outsourcing
Esperanto: Subkontraktado
français: Externalisation
한국어: 아웃소싱
Bahasa Indonesia: Alih daya
íslenska: Útvistun
עברית: מיקור חוץ
қазақша: Аутсорсинг
монгол: Аутсорсинг
Nederlands: Uitbesteding
polski: Outsourcing
português: Terceirização
русский: Аутсорсинг
саха тыла: Аутсорсинг
Simple English: Outsourcing
slovenčina: Outsourcing
українська: Аутсорсинг
Tiếng Việt: Thuê ngoài
中文: 外判