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Glossary / Lexicon

What is an external service provider?

09/13/2023 | by Patrick Fischer, M.Sc., Founder & Data Scientist: FDS

An external service provider is a company or person that provides services for another organization or individual, but is not firmly integrated into its internal organizational structure. External service providers are often referred to as "outsourcing partners." They provide specialized skills, resources, or services that are needed by the organization or individual using their services.

Here are some examples of external service providers:

IT service providers:

These companies provide IT support, software development, network maintenance, and other IT services to businesses.

Staffing agencies: these agencies help businesses recruit and hire qualified personnel.

Accounting and tax service providers: these provide accounting, tax, and financial advisory services to businesses and individuals.

Advertising and marketing agencies: these agencies develop and implement marketing campaigns, advertising efforts, and strategic marketing plans for clients.

Facility management firms: These companies provide building and facility management and maintenance services.

Using external service providers can help organizations reduce costs, focus on their core competencies, and access specialized expertise they may not have internally. However, working with external service providers typically requires clear contracts, service level agreements (SLAs), and careful monitoring to ensure that the services provided meet requirements and expectations.

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