Outsourcing

Outsourcing is the contracting out of work, that was previously done within an organisation, to an external provider. There are a number of reasons for outsourcing, the commonest are to enable a business to focus on its core business or to save costs.

Although many people associate outsourcing with the moving of work offshore (to another country, usually one with lower labour costs), outsourcing is far wider than that, and has become extremely common.

While many organisations can both reduce costs and improve management by outsourcing, there are also disadvantages. There is a loss of control involved in outsourcing, as the function outsourced is no longer under direct control. Outsourcing also exposes the organisation doing the outsourcing to the risk that its supplier may fail to deliver, or to deliver satisfactorily.