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In business, outsourcing involves the contracting out of a business process to another party (compare business process outsourcing). 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 another country). Financial savings from lower international labor rates can provide a major motivation for outsourcing or offshoring.
Outsourcing is said to help firms to perform well in their core competencies and mitigate shortage of skill or expertise in the areas where they want to outsource.
Companies primarily outsource to reduce certain costs — such as peripheral or "non-core" business expenses,high taxes, high energy costs, excessive government regulation/mandates, production and/or labor costs.
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