Which of the following best defines outsourcing?

Outsourcing is best defined as contracting out business functions to external suppliers. This practice involves a company delegating specific tasks or services, such as customer service, IT support, or manufacturing, to an outside organization that specializes in those areas. The primary goals of outsourcing can include cost reduction, access to specialized skills and resources, and allowing the company to focus on its core competencies.

By outsourcing, organizations can often achieve greater efficiency and flexibility, taking advantage of the external supplier's expertise and potentially lower labor costs. This strategy can be particularly beneficial in a competitive business environment where companies continually seek to enhance their operational efficiency and minimize expenses.

The other options do not accurately capture the essence of outsourcing. For example, the focus on reducing overhead costs through technology might be a part of an organization's broader strategy but does not directly reflect the concept of outsourcing. Similarly, hiring more onsite employees for production and creating internal teams for project management are both strategies centered around internal resource management, rather than the externalization of business functions associated with outsourcing.