Outsourcing is when a company hires an outside provider to handle some of its business activities. It's not just about saving money, but also about improving the overall business. There are different types of outsourcing, like manufacturing, IT, and business processes. Many companies are using outsourcing to save money and be more flexible financially. But there are risks involved, like hidden costs that can add up. Managers need to be aware of these risks before deciding to outsource.