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50 Outsourcing Models in Business Terms

Many businesses are turning to outsourcing as a cost-effective way to improve efficiency and expand their operations.

But with so many different options available, it can be overwhelming to navigate the world of outsourcing.

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That’s where we come in! We’ve compiled a list of 50 outsourcing models that are commonly used in business, and we’ll break them down for you in simple terms.

Whether you’re a small startup or a large corporation, there’s an outsourcing model that can help your business grow.

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Outsourcing Models in Business Terms

Outsourcing: Contracting out a business process or service to a third-party provider.
Offshoring: Outsourcing business processes or services to a company in another country.
Nearshoring: Outsourcing business processes or services to a company in a nearby country.
Onshoring: Outsourcing services to a company within the same country.
Business Process Outsourcing (BPO): Contracting a specific business task, such as payroll, to a third-party service provider.
Information Technology Outsourcing (ITO): Outsourcing IT-related tasks, such as programming or IT management, to a third-party provider.
Knowledge Process Outsourcing (KPO): Outsourcing knowledge-based and information-related business activities.
Legal Process Outsourcing (LPO): Outsourcing legal processes to an external firm or legal support services provider.
Recruitment Process Outsourcing (RPO): Delegating the recruitment process to an external service provider.
Manufacturing Outsourcing: Contracting out manufacturing processes to a third-party.
Cloud Outsourcing: Using cloud services for various business functions and processes.
Managed Services: Outsourcing daily management responsibilities and functions as a strategic method for improving operations.
Project Outsourcing: Contracting a third-party provider to handle specific projects.
Professional Services Outsourcing (PSO): Outsourcing of specialized professional services.
Selective Outsourcing: Choosing specific components or functions of a business process for outsourcing.
Total Outsourcing: Contracting out entire business functions to an external provider.
Multisourcing: Using a range of suppliers and integrating their services to meet business needs.
Co-sourcing: Sharing control of a business process or function with an external provider.
Staff Augmentation: Temporarily hiring external personnel to supplement a company’s workforce.
Transition Outsourcing: Moving business processes or services from one vendor to another.
Global Delivery Model (GDM): Providing services through a combination of offshore, nearshore, and onshore resources.
Virtual Employee Outsourcing: Hiring remote workers or virtual employees for specific roles.
Insourcing: Reverting an outsourced service or function back in-house.
Out-tasking: Outsourcing specific tasks within a larger business process.
Offshore Software Development: Outsourcing software development to a provider in another country.
Back Office Outsourcing: Outsourcing administrative and support functions.
Front Office Outsourcing: Outsourcing customer-facing services like customer support and contact centers.
Time and Material Contract: Outsourcing model based on paying for time spent and materials used.
Fixed Price Contract: A contract where the service provider is paid a set amount for a specific scope of work.
Bundled Services: Combining multiple services from a provider into a single package.
Hosted Services: Outsourcing IT services that are hosted by the service provider.
Application Service Providers (ASP): Companies that provide software applications and software-related services over the internet.
Payroll Outsourcing: Contracting an external organization to handle all payroll-related activities.
Call Center Outsourcing: Delegating call center operations to an external service provider.
Outsourced Chief Financial Officer (CFO) Services: Hiring an external, part-time CFO to manage financial strategy, planning, and reporting.
Crowdsourcing: Using a large group of people, usually from the online community, to obtain needed services, ideas, or content.
Outsourced Customer Support: Contracting external agencies to handle customer support services.
Third-Party Logistics (3PL): Outsourcing elements of a company’s distribution and fulfillment services.
Outsourced Data Center: Using third-party facilities for data storage and management.
Build-Operate-Transfer (BOT): A contract that begins with the provider building a facility, operating it for a time, and then transferring ownership to the client.
Outsourced Human Resources: Delegating HR functions to an external provider.
Franchise Model: A type of licensing agreement where a business allows another operator to trade under their brand name.
Greenfield Outsourcing: Starting an outsourcing operation from scratch, typically in a new location.
Joint Venture: A business agreement in which parties agree to develop a new entity and new assets by contributing equity.
Turnkey Project: A type of project that is constructed so that it can be sold to any buyer as a completed product.
Outsourced R&D (Research and Development): Contracting external organizations to conduct R&D activities.
Value-Added Reselling: A company adding features or services to an existing product and then reselling it as an integrated product or complete “turn-key” solution.
Strategic Outsourcing: Using outsourcing to achieve strategic goals, such as accessing new markets or leveraging advanced technologies.
Outsourced IT Security: Delegating IT security management to external specialized firms.
Business Transformation Outsourcing (BTO): Outsourcing with the goal of completely transforming a company’s processes and performance.

Hey there! So we’ve talked about 50 outsourcing models in business terms and I hope you found it informative. To quickly recap, we covered a wide range of outsourcing options that businesses can consider, from offshoring to managed services to crowdsourcing.

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