In business, outsourcing involves the contracting out of a business process to another party (compare business process outsourcing). The term "outsourcing" dates back to at least 1981.[1][2] Outsourcing sometimes involves transferring employees and assets from one firm to another, but not always.[3] Outsourcing is also the practice of handing over control of public services to for-profit corporations.[4]
Outsourcing includes both foreign and domestic contracting,[5] and sometimes includes offshoring (relocating a business function to another country).[6] Financial savings from lower international labor rates can provide a major motivation for outsourcing/offshoring.
The opposite of outsourcing, insourcing, entails bringing processes handled by third-party firms in-house, and is sometimes accomplished via vertical integration. However, a business can provide a contract service to another business without necessarily insourcing that business process.
In business, outsourcing involves the contracting out of a business process to another party (compare business process outsourcing). The term "outsourcing" dates back to at least 1981.[1][2] Outsourcing sometimes involves transferring employees and assets from one firm to another, but not always.[3] Outsourcing is also the practice of handing over control of public services to for-profit corporations.[4]Outsourcing includes both foreign and domestic contracting,[5] and sometimes includes offshoring (relocating a business function to another country).[6] Financial savings from lower international labor rates can provide a major motivation for outsourcing/offshoring.The opposite of outsourcing, insourcing, entails bringing processes handled by third-party firms in-house, and is sometimes accomplished via vertical integration. However, a business can provide a contract service to another business without necessarily insourcing that business process.
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