Outsourcing is the act of using the services of external providers in terms of performing some internal activities of the company (Chase, Jacobs, Aquilano, 2009:413). Outsourcing is not just a general purchase and consulting agreement. In addition to activity transfers, there are also resource transfers that support the activities, including people, facilities, equipment, technology, and other assets. The transfer includes the responsibility for decision-making in certain matters.

Companies outsource for different reasons. However, Chase, Jacobs and Aquilano (2009:413) explained that the advantage of outsourcing is that company can focus on activities that better represent the core competencies of the company. The company can create value or competitive advantage while reducing costs that are not very necessary. Some companies may choose to outsource all or part of the elements, depending on the company’s capabilities. The company needs to analyze important and vital parts to stay under the control of its own people, and the parts that might be worked on by third parties.