Outsourcing

The term outsourcing is an English abbreviation of outside-resource-using and means “the use of external resources”. The term was used for the first time in 1979 and referred to the British automotive industry purchasing German designs. The business concept itself emerged much earlier - in 1923.

Originally, outsourcing was understood as a sourcing strategy used by production, mainly automotive, companies, consisting in the resignation from the production of all prefabricated elements necessary for the manufacturing process and, instead, obtaining them from other manufacturers. At the end of the twentieth century the term outsourcing began to be used in a general sense to describe the strategy of delegating operations supporting the main activity of a company to external entities specializing in managing them.

Currently, outsourcing - including payroll and HR outsourcing – is treated as a modern management strategy consisting in delegating tasks that are not directly related to the core activity of the client company to a service company. This allows the client company to concentrate its resources and funds on the areas that constitute the basis of its activities and in which it gains competitive advantage.