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What is outsourcing?

Outsourcing is a practice in which a company hires another company or an individual to perform tasks that are usually performed by the company’s employees. If needed, companies can outsource entire departments.

Outsourcing is sometimes called contracting out or business process outsourcing.

The company hired for outsourcing is known as the service provider or a third-party provider. 

Examples of tasks or services that can be outsourced:

  • programming and application development 
  • customer support
  • call service
  • manufacturing processes
  • human resources tasks
  • bookkeeping and payroll

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