Offshore outsourcing is the practice of hiring an external organization to perform some business functions in a country other than the one where the products or services are actually developed or manufactured. It can be contrasted with offshoring, in which the functions are performed in a foreign country by a foreign subsidiary. Opponents point out that the practice of sending work overseas by countries with higher wages reduces their own domestic employment and domestic investment. Many customer service jobs as well as jobs in the information technology sectors (data processing, computer programming, and technical support) in countries such as the United States and the United Kingdom - have been or are potentially affected. .

There are four basic types of offshore outsourcing:

• ITO — Information Technology Outsourcing
• IBPO — Business Process Outsourcing covers things like running call centers, processing insurance claims.
• ISoftware R&D — offshore software development
• IKPO - Knowledge Process Outsourcing covers things that require a higher skill set such as reading X-Rays,   performing investment research on stocks and bonds, handling the accounting functions for a business or executing      engineering design projects.

The general criteria for a job to be offshore-able are:

• There is a significant wage difference between the original and offshore countries;

• The job can be telework;
• The work has a high information content;
• The work is easy to set up;
• The work is repeatable.

The driving factor behind the development of offshore outsourcing has been the need to cut costs while the enabling factor has been the global electronic internet network that allows digital data to be accessed and delivered instantly, from and to almost anywhere in the world.