Occurs whenever a business function or process is provided by a third-party outside of the organization.

• A. Insourcing
• B. Offshoring
• C. Outsourcing
• D. Resourcing

Answer: (C)

Outsourcing means a business function or process is performed by an external third party rather than by internal staff. The defining idea is handing over the work to a vendor outside the organization, which lets the company access specialized capabilities, scale more easily, or reduce costs. If the function is kept in-house, that’s insourcing; moving the work to another country is offshoring (which may still involve an external provider, but the key distinction is the location). Resourcing isn’t the standard term for this setup. For example, having a managed service provider handle your IT support or cloud services illustrates outsourcing—the work is done by an external organization, not by your own employees. When outsourcing, it’s important to manage vendor risk with clear contracts and security controls.