What does outsource mean?
To outsource is to arrange for work that could be done within an organization to be performed by an outside company, freelancer, or specialist provider. The term is especially common in business and technology, where organizations outsource functions such as customer support, payroll, software development, manufacturing, or marketing. Outsourcing may be chosen to reduce costs, access specialized expertise, increase flexibility, or focus internal resources on core activities. Its implications depend on context: it can describe an efficient business arrangement, but it may also suggest job displacement, loss of control, or reliance on outside providers. The word is related to “source” and developed from the idea of obtaining a needed service or product from an external source.
verbTo arrange for work, services, or production to be carried out by an external organization or individual rather than by the organization itself. It can also refer to transferring an activity or business function to such an outside provider.
- To arrange for work or a business function to be performed by an outside organization or individual.
- To transfer a process, service, or production activity from an organization to an external provider, often as a cost- or expertise-saving measure.
"The company outsourced its payroll processing to a specialist provider."
"The startup outsourced its design work to an independent studio."
"Rather than hire another administrator, the charity outsourced its bookkeeping to an accounting firm."
What is 'inside' a company can be 'outside' by contract: outsourcing turns an internal job into an external partnership.
Reviewed by Deb Chak, Editor. AI-assisted content curated by RJS Tech Solutions LLP.
Where does outsource come from?
Outsource is a compound formed from the prefix “out-” and the word “source,” expressing the idea of obtaining a service or product from an outside source. “Source” comes through Old French from Latin “sursus,” a participle of “surgere,” meaning “to rise” or “to spring from.” The same Latin root is reflected in related English words such as “resource” and “recourse.” The modern business use of “outsource” developed as organizations increasingly contracted with external parties to perform specialized work and services.
Related word forms
How outsource is actually used
The term is common in business, technology, government, and media contexts. It can be neutral when describing a practical arrangement, but may carry a negative connotation when it suggests reduced control, job losses, or the replacement of permanent staff with contractors.
Easily confused with outsource
To source something is to obtain it from a supplier or other origin, whereas to outsource it is specifically to transfer the performance of a work process or business function to someone outside the organization.
Outsourcing moves a function to an external provider, while insourcing brings work previously performed outside the organization back in-house.