Outsourced

Outsourced is the past participle and adjective of outsource. In business, to outsource a function is to obtain it from an external provider rather than performing it in-house. The term first gained prominence in the late 20th century with the rise of global trade and information technology, and it distinguishes activities that are contracted to third parties from those kept under corporate control.

Common domains include information technology (IT) services, customer support, human resources processes, accounting, and manufacturing. Within outsourcing, firms may source from domestic suppliers (onshore), nearby countries (nearshore), or distant locations (offshore). A related term is business process outsourcing (BPO) and knowledge process outsourcing (KPO).

Outsourcing is typically pursued to reduce costs, access specialized expertise, scale operations, or allow management to focus on core competencies. It is usually governed by contracts and service-level agreements (SLAs) that specify performance, quality, timelines, and security requirements. Risks include loss of control, supplier dependency, data security and privacy concerns, quality variation, and potential impact on employees and culture.

Critics argue that outsourcing can erode domestic employment, contribute to wage suppression, and complicate regulatory compliance. Proponents point to efficiency gains, broader access to talent, and the creation of flexible capacity. In practice, many organizations use a hybrid approach, maintaining strategic activities in-house while outsourcing routine or non-core work.

See also: outsourcing, offshoring, nearshoring, insourcing, service-level agreement.