DEFINITION: To “outsource” is for one company to hire a second, external company to perform a business activity ordinarily carried out by one of the first company’s internal departments.

ETYMOLOGY: The verb “outsource,” and the noun “outsourcing,” derive, via Middle English, from the Old English word ūt, meaning “out,” which is akin to the Old High German word ūz, with the same meaning.

The word “source” derives, via Middle English and Middle French, from the Old French verb, sourdre, meaning “to rise” or “to spring forth, which in turn derives from the classical Latin verb surgo, surgere, meaning to “to rise,” “to get up,” “to stand up,” “to spring up,” or “to arise.”

The practice we now call “outsourcing” was originally referred to as “outside resourcing.” The term “outsource” is thought to have been created—most likely sometime around 1980—as a telescoped form of this phrase.

USAGE: The practice of outsourcing—as opposed to the term itself—has its origins in the upheaval in business and management practices which followed upon the economic boom in the wake of World War II.

Some of the first business functions to be outsourced were such things as payroll processing, claims processing, auxiliary (non-core) manufacturing functions, and customer service or call center support, among others.

If the companies to which a business function is outsourced are located in a foreign country, we speak of “offshoring,” which is a subset of outsourcing.

While outsourcing is primarily a practice of the private sector, in recent decades a wide variety of government functions have begun to be outsourced, as well, including notably, prisons and various forms of security and quasi-military operations, from personal protection of public officials to the provisioning of government army units deployed in conflict zones.