Outsourcing is the transfer of ownership of an organization's business activities (processes or functions)-or the responsibility for the business outcomes flowing from these activities-to a service provider. In a typical outsourcing arrangement, the people, the facilities, the equipment and the technology (the Factors of Production) are also transferred to the service provider, which then uses the Factors of Production to provide the services back to the organization. The people are often transferred to the service provider, but this is not always the case.