Outsourcing

In business, outsourcing involves the contracting out of a business process to another party. Outsourcing sometimes in­volves transferring employees and assets from one firm to an­other, but not always. Outsourcing is also the practice of hand­ ing over control of public services to for-profit corporations.

Outsourcing includes both foreign and domestic contracting, and sometimes includes offshoring (relocating a business function to another country]. Financial savings from lower in­ ternational 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.