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out⋅source
[out-sawrs, ‑sohrs]
verb, -sourced, -sourc⋅ing.| 1. | (of a company or organization) to purchase (goods) or subcontract (services) from an outside supplier or source. |
| 2. | to contract out (jobs, services, etc.): a small business that outsources bookkeeping to an accounting firm. |
| 3. | to obtain goods or services from an outside source: U.S. companies who outsource from China. |
1975–80
Related forms:
Based on the Random House Dictionary, © Random House, Inc. 2009.
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out·source (out'sôrs', -sōrs') tr.v. out·sourced, out·sourc·ing, out·sourc·es To send out (work, for example) to an outside provider or manufacturer in order to cut costs. |
| out·sourc·ing (out'sôr'sĭng, -sōr'-) n. The procuring of services or products, such as the parts used in manufacturing a motor vehicle, from an outside supplier or manufacturer in order to cut costs. |
Copyright © 2009 by Houghton Mifflin Company.
Published by Houghton Mifflin Company. All rights reserved.
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| Main Entry: | outsourcing |
| Part of Speech: | n |
| Definition: | See insourcing |
Outsourcing
A practice used by different companies to reduce costs by transferring portions of work to outside suppliers rather than completing it internally.
Investopedia Commentary
Outsourcing is an effective cost-saving strategy when used properly. It is sometimes more affordable to purchase a good from companies with comparative advantages than it is to produce the good internally. An example of a manufacturing company outsourcing would be Dell buying some of its computer components from another manufacturer in order to save on production costs. Alternatively, businesses may decided to outsource book-keeping duties to independent accounting firms, as it may be cheaper than retaining an in-house accountant.
See also: Explicit Cost, Implicit Cost, Opportunity Cost, Outlay Cost
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outsourcing business
Paying another company to provide services which a company might otherwise have employed its own staff to perform, e.g. software development.
(1995-03-28)
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outsourcing
work arrangement made by an employer who hires an outside contractor to perform work that could be done by company personnel. Outsourcing has been a frequent point of dispute for organized labour. If, for example, an employer has a labour contract with a union, and the outsourced work could be performed by union members, then the union will typically object to such a practice because it takes work away from the union's members. Management favours outsourcing, or subcontracting, often to nonunion providers, because these activities can often reduce costs. Outsourcing can also reduce the number of employees in a collective bargaining unit
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