Outsourcing is an agreement in which one company hires another company to be responsible for a planned or existing activity that is or could be done internally.It often involves the contracting of a business process (e.g., payroll processing, claims processing), operational, and/or non-core functions, such as manufacturing, facility management, call center support). The term "outsourcing" came from "outside resourcing" and dates back to at least 1981. Outsourcing sometimes involves transferring employees and assets from one firm to another.
Outsourcing is also the practice of handing over control of public services to private enterprises.Outsourcing includes both foreign and domestic contracting, and sometimes includes offshoring (relocating a business function to a distant country) or nearshoring (transferring a business process to a nearby country).
Offshoring and outsourcing are not mutually exclusive: there can be one without the other.