ABSTRACT
This chapter focuses on the definition of outsourcing and subcontracting and discusses the prerequisites for outsourcing and the reasons for choosing it as an option. It considers which areas might be amenable to outsourcing and explores some of the difficulties that might arise. The chapter examines the need for planning of outsourcing within the organization. Outsourcing is a sophisticated form of subcontracting that involves greater cooperation in the conceptualization and performance of activities, increased accountability for the results and greater specialization as in “facility management” or “information management”. As a rule, the most commonly outsourced functions are general and support services, followed by logistics, information technology and telecommunications. Outsourcing is not a magic solution to every problem. Its success depends on planning and the method of implementation. Outsourcing is the act of delegating, over a number of years, the management of one or more functions of the organization to an external provider.
