What is outsourcing?

Literally from English outsourcing, which is an abbreviation of Outside Resource Using, means export of production. This is a concept for taking internal functions from a given company and providing them for execution to an external company. The organization to which the activity is exported is called outsource destination. There are many reasons for outsourcing to be widely practiced. The most common of them are:

• Saving financial resources;
  
• Increasing productivity and/or quality;
  
• Transfer to destination of production export of certain risks;
  
• Use of external/third party qualification;
  
• Releasing company resources for its main activities.

The situation is similar when a company produces a certain product with materials provided by the client. This can be viewed as production export which becomes very popular as a result from the globalization process. The main destination is the Far East. When the product is exported abroad the term used is cross-border outsourcing (or offshore outsourcing).