What Is Outsourcing?
Definition of Outsourcing?
A common definition for outsourcing is; The transferring of management and / or day-to-day execution of a business process to an external / third party. In any outsourcing agreement, there are at least two parties involved:
Client: The company that makes the decision to outsource a business process / task to an external party.
Provider: The company that executes the tasks on behalf of the client
This is the most basic form of an outsourcing agreement. In a larger more complex outsourcing situation, there may be brokers in between the client and provider and/or even multiple providers.
Outsourcing: Business Process
There are three main categories:
- Information Technology Outsourcing
- Voice Outsourcing
- Non-Voice Outsourcing
Outsourcing: Geographical Distance
Again there are three types of main categories:
- Inshoring / Onshoring: Both client and provider are located in the same country
- Nearshoring: Client and provider are in different countries, but are a relatively shirt distance from each other. For example, the US and Canada
- Offshoring: Client and provider are in different countries and are a distance. For example, US client outsourcing to a Philippines provider