Application Service Provider (ASP)
An ASP is a company that provides applications and related services
over the Internet. Examples include email, payroll processing and ERP
Business Process Outsourcing (BPO)
BPO is the outsourcing of Back Office and Front Office functions,
typically performed by white collar and clerical workers. Examples include
accounting, human resources and medical coding and transcription.
Competitive Insourcing is a process whereby internal employees are
competing in bidding against competitive, third-party bidders for a
defined scope of work. See also Insourcing.
Contract Manufacturing is the outsourcing of a manufacturing job
to an onshore or offshore third-party. With the necessary infrastructure
and know-how to perform the job.
Co-Sourcing or Cosourcing
Cosourcing is where a business function is performed by both internal
staff and external resources, such as consultants or outsourcing vendors,
with specialized knowledge of the business function.
A solution in which the customer entrusts to an external
services provider the responsibility for operations and maintenance
of one or more facilities. Compare:
Insourcing is the transfer of an outsourced function to an internal
department of a company, to be managed entirely by employees. The term
has also been used to describe foreign companies that start facilities
in the United States and employ U.S. workers.
Nearshoring is outsourcing within nearby territory, accessible by
short travel or telephone in the same or neighboring time zone.
Offshoring is outsourcing overseas or in a separate country. Outsourcing
to a contiguous country may be considered as Nearshoring (see above).
Service Level Agreement (or SLA)
An SLA is a contract or addendum to a contract that defines the type,
value and conditions of the outsourcing services to be provided. Typically,
SLAs deal with the quality of service conditions, such as response time,
availability, speed, et cetera.
Shared Services is the outsourcing of a business function within
an enterprise to a highly skilled internal department or group. For
example, the purchasing department at one plant, may provide purchasing
services to all other plants, within a given manufacturing company.
Shared services may also be provided to third parties.