In business, outsourcing involves the contracting out of a business process to another party (compare business process outsourcing). The concept “outsourcing” came from American Glossary ‘outside resourcing’ and it dates back to at least 1981. Outsourcing sometimes involves transferring employees and assets from one firm to another, but not always. Outsourcing is also the practice of handing over control of public services to for-profit corporations.
Outsourcing includes both foreign and domestic contracting, and sometimes includes offshoring (relocating a business function to a distant country) or Nearshoring (transfering a business process to a nearby country). Financial savings from lower international labor rates can provide a major motivation for outsourcing or offshoring.