アウトソーシングOutsourcing

Learn in the textbookLeveraging External Resources and Inter-Company Collaboration

DefinitionOutsourcing (アウトソーシング) means entrusting part of your company's work to an outside provider.

ExplanationHanding non-core work to a specialist frees your own staff and funds for the core business. Handing a whole business process, such as HR or accounting, to an outside firm is called BPO (business process outsourcing). On the other hand, the experience and skills behind the outsourced work are harder to build up inside the company.

AnalogyIt is like hiring a housekeeping service for cleaning and cooking and spending the freed-up time on your own work.

Memory hookOut + sourcing: you source the work you need from outside the company.

Learn in the textbookClassic Solutions and Data Center Services

DefinitionOutsourcing (アウトソーシング) means having part or all of the work a company has been doing itself entrusted to an outside specialist.

ExplanationThe work handed over is not limited to developing or running systems; it also includes tasks such as accounting and customer help desks. When the contractor is abroad it is called offshore outsourcing (オフショアアウトソーシング), and regions with lower labor costs are often used. A company can focus its people and money on its core business, though know-how in the outsourced work is less likely to build up inside the company.

AnalogyIt is like a shop owner leaving the bookkeeping to an accounting firm and spending the time on making products and serving customers.

Memory hookout + source: you source the work you need from outside the company.