Outsourcing Glossary

Plain-English definitions of common outsourcing, vendor-management, and service-governance terms.

Business process outsourcing (BPO)

An arrangement where a provider handles a defined business process such as support, payroll administration, document processing, or back-office work.

Managed service

An outsourced service where the provider operates an ongoing function under defined scope, reporting, and service expectations.

Staff augmentation

A model where external workers add capacity to an internal team while the buyer usually retains day-to-day direction.

Service level agreement (SLA)

A documented set of service expectations such as response time, resolution targets, availability, quality, escalation, and reporting.

Statement of work (SOW)

A document that describes scope, deliverables, assumptions, timelines, responsibilities, and acceptance criteria.

Nearshore outsourcing

Using a provider in a nearby country or compatible time zone.

Offshore outsourcing

Using a provider in a more distant country or labour market, often with time-zone and coordination differences.

Onshore outsourcing

Using a provider in the same country as the buyer.

Governance

The routine for reviewing performance, issues, risk, invoices, changes, and improvement after the work is outsourced.

Exit plan

A plan for returning, transferring, or ending outsourced work safely, including records, access, and transition help.

Change request

A formal request to adjust scope, deliverables, timing, pricing, or responsibilities after the original agreement.

Root-cause review

A structured review that asks why a problem happened and what should change to reduce recurrence.