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What is an Outsourcing  Agreement?

Reading time: 10 minutes

Quiz time: 3 minutes

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Outsourcing agreement refers to any formal contract or agreement between an organisation (client) and another company or service provider on outsourcing. This contract lays out the terms of outsourcing of certain functions or processes which are provided by the external service providers.

Whenever companies feel that focusing their resources of competencies where it should focus such as concentrating in the area of strength, they go for an outsource agreement which is contractually agreed with another firm whose core competency lies in the provision of non-core functions not offered by them. They can cover areas such as IT outsourcing, BPO , customer support, manufacturing et al. Such contracts aid clients and vendors to recognize obligations, duties, and anticipations that they hold in common.