Outsourcing: meaning, definitions and examples

Used when a company hires another company to handle certain tasks or services that could be performed internally. Often used in business and technology sectors.

• The company is outsourcing its customer service operations to a firm in India.
• Outsourcing IT support can be cost-effective for small businesses.

Used when a company enters into a formal agreement with another organization to perform a specific task or service. Emphasizes the official nature of the arrangement.

• They are contracting out the cleaning services to a local provider.
• The school district is contracting out its transportation services to a private bus company.

Used when a company that has a contract with another company assigns part of the work to a third party. Often seen in construction, manufacturing, and large projects.

• The construction company is subcontracting the electrical work to a specialized firm.
• They had to stop subcontracting because the quality of work didn't meet their standards.

More formal and less commonly used in everyday business language. Often used in academic or strategic discussions about shifting functions to outside entities.

• Externalization of non-core activities can lead to more focused business operations.
• The externalization of production has become a trend in the global economy.

Used when giving a task or responsibility to someone else, typically within the same organization. It implies entrusting duties to others while still maintaining overall responsibility.

• She decided to delegate the project management to her assistant.
• The team leader delegated tasks to members to improve efficiency.

Used for hiring another company or individual to complete part or all of a job that has been contracted. Often used in construction, engineering, and similar fields.

• The construction firm subcontracted the electrical work to a local electrician.
• We need to subcontract the painting work to meet the deadline.

Informal term used for giving pieces of work to various people or organizations. It can imply distributing parts of a larger project.

• The company farmed out the production of parts to several factories.
• We had to farm out some of the simpler tasks to freelancers.