Which term refers to the entity that delegates a function to another entity?

• A. Outsourcer
• B. Third party
• C. Fourth party
• D. Vendor

Answer: (A)

Outsourcing is when one organization delegates a function to an external entity. The entity that does the delegating is the outsourcer. This distinction matters because the outsourcer retains overall accountability for the outcome, while the actual work is carried out by the service provider under a contract, with oversight and governance controls necessary to manage risk, security, and compliance.

A third party is a broad term for any external organization involved in the business relationship, not specifically the one initiating the delegation. A vendor typically refers to a supplier of goods or services but doesn’t inherently describe the act of delegating a function. A fourth party sits further down the chain—usually the supplier’s supplier—rather than the entity that initiates the outsourcing arrangement.