externalisation

Externalisation is the process of transferring activities, responsibilities, or knowledge from an internal organization or individual to an external entity or representation. The term is used in several disciplines; in English, externalisation (BrE) or externalization (AmE) is the variant spelling.

In business and information technology, externalisation typically refers to outsourcing or offshoring—contracting services or processes to third parties. Common forms include business process outsourcing, IT outsourcing, and manufacturing externalization. Motivations: cost reduction, access to specialized capabilities, efficiency, scalability. Risks: loss of control, quality variability, data security, dependency, potential hidden costs. Management practices: governance structures, service level agreements, vendor risk management, transition planning.

In psychology and psychotherapy, externalisation is a defense mechanism or therapeutic technique where internal experiences are described as originating outside the self, or as problems located in external agents. In narrative therapy, externalising conversation helps clients separate identity from problems; benefits include reduced self-blame; caveats include potential avoidance of responsibility and misinterpretation.

In knowledge management, externalisation denotes converting tacit knowledge into explicit knowledge through articulation and codification. In economics or sociology, it sometimes refers to the creation of externalities or to the process by which internal processes are made observable to others. The term is less common in everyday use than outsourcing but related concepts exist.

See also: outsourcing, offshoring, nearshoring; spelling variants; not to confuse with externalities.