Which term refers to outsourcing certain business processes?

The term that refers to outsourcing certain business processes is Business Process Outsourcing. This practice involves contracting specific functions or processes of a business to third-party service providers instead of handling them internally. Organizations often choose this approach to decrease operational costs, focus on core activities, improve service quality, and enhance efficiency by leveraging external expertise.

For instance, a company may opt to outsource its payroll processing or customer service to specialized firms, allowing it to concentrate on strategic initiatives that drive growth. The term encapsulates a range of services, including IT services, human resources, and various administrative tasks, all intended to improve the overall productivity of the outsourcing organization. This understanding is pivotal in the context of contemporary business strategies and the increasing trend towards specialization and efficiency through outsourcing.