Outsourcing is defined as being one of allocating or reallocating business activities from an internal source to an external source (Schniederjans, Schniederjans, & Schniederjans, 2005, p. 3). Any business activity can be outsourced. All or part of any of the unique business activities in a functional area, like management information systems, which have been historically insourced can be outsourced today. Outsourcing, however, requires an agreement with an external organization. If a contract can be written to define any type of business activity between a client organization and its potential outsource provider, then that business activity can be outsourced.
Outsourcing is not a new concept according to James and Weidenbaum (1993, p. 42) but can find its origins in the practice of subcontracting production activities. For example, the use of external lawyers or information technology consultants can be viewed as outsourced services. Indeed, the classic “buy-ormake” decisions on service products, processes, and facilities, which companies have been making for many decades, are examples of outsourcing from external organizations (Russell & Taylor, 2003, p. 126). Regardless of its origin, outsourcing is not a revolution but an evolution of change in business organizations and the way they conduct business activities.