Outsourcing can be generally defined as follows

Outsourcing is a process that a firm or an organization entering into a contract with another firm or an organization to operate and manage one or more of its business processes.

Generally the outsourcing processes that are outsourced are the supporting activities and not of extremely high strategic importance, but necessary for doing business or improving business. The key and the strategic benefit of Outsourcing is the Outsourcing Company can focus on Core Competency of their business by giving the supporting activities to experienced professionals (Outsourcing Service Providers) in relevant area.

Global competition is the most important issue facing top decision makers in some of the world's largest companies today. To meet this challenge, leading companies worldwide are focusing their resources on their core competencies as a business strategy to compete profitably in a global market. Outsourcing is paving the way for leading companies to compete globally and increase profitability into the new millennium. The practice is gaining widespread acceptance throughout the United States, Europe, South America, and Asia Pacific as an important new management tool to improve performance and profitability, gain competitive advantage in the global marketplace, and ultimately build shareholder value.

“More and more companies are looking at outsourcing not just as a tactical, reactive, but as a strategic and proactive move,” states Frank J. Casale, Chairman of The Outsourcing Institute.