what is outsourcing?

“Contracting with a vendor to provide a service rather than providing it yourself”
Outsourcing, in literal terms, means sourcing from outside. It is the contracting out of a company’s non-core, non-revenue producing activities to specialists.
Principle types
Traditional outsourcing : Here the routine jobs or tasks that the staff of the organization does not perform are identified and the service provider usually hires staff for this job. Greenfield outsourcing : Without hiring the service provider the organization can directly hire an imminent company which can execute their business which was not done in the organization internally.
Common types
Information Technology (IT) Outsourcing Web site development Software development Network backbone services IT remote support Business Process Outsourcing (BPO) Call centers Payroll Finance functions and activities E-publishing Book keeping services Accounting Human resources CAD services
Factors
For an organization the decision to outsource can be brought about by a number of factors:
Heavy workload Lack of time or urgency Lack of expertise Deplorable cost to perform services Shift to new technologies and/or existing technologies Add to existing staffing levels hastily Focus on operational, functional, or technical limitations Return the focus of staff to core capabilities Hasten benefits by rapidly employing services or projects Trim down costs in an explicit functional area Increase service levels Reduce capital costs Cut recurring operational costs Enable business tactics and/or transformations

http://www.itmatchonline.com/itwhat_is_outsourcing.php