Outsourcing defined

The most complete definition of the outsourcing concept that I know of is:

’... the transferring of an internal business function or functions, plus any associated assets, to an external supplier or service provider who offers a defined service for a specified period of time, at an agreed but probably qualified price’.

It must be understood that the control of the functions in question will thus reside with the service provider. This outside organization, as a specialist in its field, will usually be in a position to add value not normally obtainable in a non-core function retained in house.

Outsourcing has now become a familiar idea to the business and associated media world. However, it is often used as an umbrella term for a variety of different arrangements, not all of which involve adding value or the permanent transfer of personnel. These arrangements may be better defined by the following terms.