hand pointing at word outsourcing with map of world in the background

What is Outsourcing?

You may have heard the term “outsourcing” before, but you may not know what this term means. Outsourcing is common in business, and many companies practice it on a daily basis. If a company cannot or chooses not to complete some operations in-house, it may request another business to handle the task for them. Anything from payroll to machine operations can be outsourced to other companies. The word itself comes from the term “outside resourcing,” although over time, it has been cut down to “outsourcing.”

Many things are outsourced from one company to another, and you may not think twice about it. One example could be when a contractor or architect requests another business to handle the millwork for a job. A contractor may not have the machinery necessary to handle cutting out materials for a construction job.

A second example can be found in huge businesses such as Walmart. Large supercenters do not have the ability to count inventory, which has to be frequently completed to ensure that there is enough stock when a customer comes to purchase it. Walmart outsources inventory to other companies that come in at certain times during the year to ensure that stock is correct.

These are just two examples, but companies can outsource so much more, including:

  • Advertising
  • Payroll
  • Bookkeeping
  • Building Maintenance
  • Purchasing
  • Security
  • Field Service Dispatch
  • Customer Support
  • Tax Preparation
  • Web Design
  • Manufacturing
Last Updated: March 11, 2016

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