What is the purpose of outsourcing in procurement?

Outsourcing in procurement refers to the practice of contracting an external organization to perform specific functions or services that could be executed internally. This strategy allows businesses to focus on their core competencies while leveraging the expertise, efficiency, and often cost benefits that a specialized external provider can offer. By engaging a third-party service provider, organizations can typically reduce operational costs, access advanced technologies or specialized skills, and enhance flexibility in their operations.

In this context, the choice that identifies the purpose of outsourcing accurately captures the essence of this strategy. Organizations choose to outsource to take advantage of external resources rather than managing all activities in-house, which can also potentially lead to increased operational efficiency and improved service delivery.