Outsourcing
The process of outsourcing formalizes the description of the non-core operation into a contractual relationship between the client and the supplier. Under the new contractual agreement the supplier acquires the means of production which may include people, processes, technology, intellectual property and assets. The structure of the client organization changes as the client agrees to procure the services of the outsourcer for the term of the contractual agreement.
The decision to outsource is often made in the interest of lowering firm costs, redirecting or conserving energy directed at the competencies of a particular business, or to make more efficient use of labor, capital, technology and resources.
