The Different Types of Outsourcing You Need To Know About

The term ‘outsourcing’ is one you’ve probably heard often. But are you familiar with the different types of outsourcing that businesses rely on every day?

Whether you’re a startup trying to streamline your operations or a large enterprise managing global operations, outsourcing can offer cost-efficiency, speed, and specialized skills without the burden of full-time hires.

Many people confuse the concept of outsourcing with terms like offshoring, nearshoring, and reshoring—but these refer to location, not type. The types of outsourcing, on the other hand, are based on the nature of the task or function being delegated.

Let’s dive into the most essential types of outsourcing you need to know to make smarter business decisions.

IT Outsourcing

What it is:
Delegating IT-related tasks to an external vendor or team.

Why businesses use it:
IT outsourcing is one of the most in-demand services today. From software development, app building, and website management to cloud infrastructure and IT support, businesses of every size rely on it.

Whether you’re a small business without a full-fledged tech team or an enterprise needing specialized development, outsourcing your IT needs reduces cost and boosts efficiency.

Business Process Outsourcing (BPO)

What it is:
Outsourcing recurring operational tasks to third-party specialists.

Common examples:

• Customer service outsourcing

• Logistics outsourcing (e.g., shipping with FedEx or UPS)

• Data entry and admin support

BPO is ideal for companies that want to focus on their core offerings while handing off routine functions to professionals who do it better—and often, cheaper.

Professional Outsourcing

What it is:
Hiring external professionals for specific, skilled functions.

Services that fall under this:

• Accounting & finance

• Legal services

• HR & recruitment

• CAD design

• Digital marketing

• Procurement

Instead of hiring a full-time employee for each of these specialized roles, you can outsource selectively and pay only for the services you need.

Project Outsourcing

What it is:
Delegating a specific project to an external team for completion.

Ideal for:

• Website redesign

• Product launches

• Marketing campaigns

• Video production

• Research projects

If you don’t have the bandwidth or skills to manage a time-sensitive initiative in-house, project outsourcing is your best bet.

Manufacturing Outsourcing

What it is:
Using a third-party manufacturer to produce your goods or components.

Why businesses do it:
Startups and SMEs may not have the budget to manufacture in-house. Even larger companies outsource production of certain parts to reduce cost or meet demand.

From clothing to electronics to packaged goods, manufacturing outsourcing helps maintain scale, speed, and affordability.

Why Understanding These Types of Outsourcing Matters

Knowing what to outsource—and how—can significantly improve your operational efficiency and bottom line. Each type of outsourcing serves a different business goal, and when implemented well, it gives you:

• Access to specialized skills

• Lower operational costs

• Greater scalability

• Better resource allocation

• Increased focus on core business growth

Need Help Choosing The Right Outsourcing Model?

At F5 Hiring Solutions, we provide customized outsourcing solutions across all of the types listed above. Whether it’s an IT project, a marketing campaign, or end-to-end customer service management—we’ve got the right talent ready to go.

We Hire What You Desire.

Let’s talk about your business needs today.