Outsourcing is leveraging the expertise of another company or independent provider by a company or people other than the original company's employees. Outsourcing entails purchasing a product or process from an external provider rather than producing this product or process in-house. The business that is outsourcing will train outsourcing provider to form a supply chain partnership.
Outsourcing is not just a way to reduce costs; it is an essential element for achieving business excellence. Outsourcing enables an organization to focus on the things it does best – its core competencies. At the same time, through outsourcing it can leverage the resources and expertise of equally focused outside providers. The combined effect is a powerful management tool for competitive advantage, improved business performance and operational transformation.