How Many Types of Outsourcing Are There?

Accounting Services in Baltimore. There are many ways to categorize outsourcing, but most businesses classify them along two main dimensions: by Location and by Function (what is being outsourced).

While you could list over a dozen specific types (like Legal Process Outsourcing or Finance Outsourcing), the most essential and commonly recognized categories are three by location and three by function.

I. Types Based on Location (Where the Service is Provided)

These are the three most common geographical models, chosen based on cost, cultural fit, and time zone alignment:

II. Types Based on Function (What Process is Outsourced)

These categories group the type of work being delegated, from simple administration to advanced research: The Complete View

In practice, a single company often uses a hybrid model, blending different types—for example, a company might use Offshore BPO for Tier 1 customer support but use Onshore KPO for complex legal and financial analysis.

Ultimately, the type of outsourcing chosen is always dictated by two factors: the need for specialized skill and the desired level of cost reduction.