Outsourcing is a business practice in which companies use external providers to carry out business processes that would otherwise be handled internally, [1][2] or in-house.[3] Outsourcing 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 at a time when industrial jobs in the United States were being moved overseas, contributing to the economic and cultural collapse of small, industrial towns.[4][5][6]
The practice of handing over control of public services to private enterprises (privatization), even if conducted on a limited, short-term basis,[8] may also be described as outsourcing.[9]
Outsourcing includes both foreign and domestic contracting,[10] and therefore should not be confused with offshoring which is relocating a business process to another country but does not imply or preclude another company.[11] In practice, the concepts can be intertwined, i.e. offshore outsourcing, and can be individually or jointly, partially or completely reversed,[12] as described by terms such as reshoring, inshoring, and insourcing.
^Ian McCarthy; Angela Anagnostou (2004). "The impact of outsourcing on the transaction costs and boundaries of manufacturing". International Journal of Production Economics. 88 (1): 61–71. CiteSeerX10.1.1.468.9139. doi:10.1016/s0925-5273(03)00183-x.
^Hira, Ron; Hira, Anil (2005). Outsourcing America: What's Behind Our National Crisis and how We Can Reclaim American Jobs. American Management Association. pp. 67–96. ISBN978-0-8144-0868-1.
^Davies, Paul. What's This India Business?: Offshoring, Outsourcing, and the Global Services Revolution. London: Nicholas Brealey International, 2004. Print.[page needed]