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Outsourcing allows organizations to pay for the services and business functions they need, when they need them. companies do not outsource to reduce executive or managerial costs. Streamlining or increasing efficiency for time-consuming functions. Many think of outsourcing as it relates to manufacturing.

It also reduces the need to hire and train specialized staff, brings in fresh engineering expertise, and can reduce capital, operating expenses, The slogan was primarily used to advocate outsourcing as a viable business strategy. Drucker began explaining the concept of "Outsourcing" as early as 1989 in his Wall Street Journal article entitled "Sell the Mailroom." The business strategy outlined by his slogan recommended that companies should take advantage of a specialist provider's knowledge and economies of scale to improve performance and achieve the service needed. companies due to unusually high corporate taxes and mandated benefits like social security, Medicare, and safety protection (OSHA regulations). For instance, executive pay in the United States in 2007 was more than 400 times more than average workers—a gap 20 times bigger than it was in 1965. However, outsourcing of white-collar work has grown rapidly since the early 21st century.

It involves the contracting out of a business process (e.g.

high taxes, high energy costs, excessive government regulation or mandates, and production or labor costs. The digital workforce of countries like India and China are only paid a fraction of what would be minimum wage in the US.

On average, software engineers are getting paid between 250,000 and 1,500,000 rupees (US$4,000 to US$23,000) in India as opposed to $40,000–$100,000 in countries such as the US and Canada.

This often requires the assimilation of new communication methods such as voice over IP, instant messaging, and Issue tracking systems, new time management methods such as time tracking software, and new cost- and schedule-assessment tools such as cost estimation software.

In the area of call center outsourcing, organizations that are not experienced in working with outsourced call centers may suffer from lower end-user-experience as a result of outsourcing.

Outsourcing has also expanded to include many different countries; Costa Rica has become a big source for outsourcing work as it offers the advantage of a highly educated labor force, a large bilingual population, stable democratic government, shares similar time zones with the United States, and it takes only a few hours to travel between Costa Rica and the US.

Companies such as Intel, Procter & Gamble, HP, Gensler, Amazon and Bank of America have big operations in Costa Rica.The visual cues that are missing in a telephone call may lead to misunderstandings and difficulties. Williamson wrote that the governance structure is the "framework within which the integrity of a transaction is decided." Adding further that "because contracts are varied and complex, governance structures vary with the nature of the transaction." University of Tennessee researchers have been studying complex outsourcing relationships since 2003.Emerging thinking regarding strategic outsourcing is focusing on creating a contract structure in which the parties have a vested interest in managing what are often highly complex business arrangements in a more collaborative, aligned, flexible, and credible way.This is exacerbated when outsourcing is combined with offshoring in regions where the first language and culture are different.For example, foreign call center agents may speak with different linguistic features such as accents, word use and phraseology, which may impede comprehension.In the recent years there has been an exponential growth in white collar work with service providers emerging in a wide range of activities, from banking and legal services to companies like Resources US, a pioneer in outsourcing services for architecture firms in United States.

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