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Glossary of software outsourcing terms

Each glossary entry defines one term a buyer meets when scoping, contracting or running an outsourced software project. It gives a concise definition, why the term matters, an example in context and the common misreadings, then names the decisions the term affects and links the guide that covers each decision in depth.

By Netbase Editorial Team · Reviewed by Huy Nguyen (David), CEO · Updated 5 Nov 2026

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OAuth
OAuth

OAuth is an authorisation framework that lets one application obtain limited access to a service on a user's behalf, through a token scoped to specific actions, so the application never has to see or store the user's password for that service.

Rate limiting

Rate limiting

Rate limiting is a cap on how many requests a client may send to a server within a set period; once a caller reaches that cap, the server rejects or delays its next requests until the period resets, so no single caller can exhaust the capacity other callers depend on.

 Runbook

Runbook

A runbook is a documented series of steps for a routine operation or a known failure: it names the desired outcome, who may run it, the tools and permissions it needs, how to handle an error along the way, and who to escalate to if a step does not resolve the problem.

 Staging environment

Staging environment

A staging environment is a separate, production-like place where a release, an upgrade or a migration is rehearsed before it reaches real users; it runs the same or closely matching software, configuration and services as production, so a problem surfaces there first instead of after go-live.
Idempotency
Idempotency

Idempotency is the property that repeating the same request has the same effect on a server as making it once: if a client sends a call, does not get a confirmed answer, and sends the identical call again, the system ends up in the same state as if the call had been made only a single time.

Observability

Observability

Observability is the property of a system that lets a team ask new questions about its behaviour from the outside, through the logs, metrics and traces it emits, without already knowing what to look for, so it can explain something that went wrong in a way nobody predicted or wrote a check for in advance.

 Prompt injection

Prompt injection

Prompt injection is an attack in which text an AI model reads, whether typed by a user or sitting inside a document, web page or tool result the model is given, carries instructions the model follows instead of the ones its operator intended, redirecting what the model does next.

 Webhook

Webhook

A webhook is an HTTP request that a system sends, on its own, to a URL another system registered in advance, the moment a chosen event happens; the receiver is told as soon as it occurs, instead of having to ask on a schedule whether anything changed.
Cutover
Cutover

A cutover is the time-boxed switch from an old system to its replacement: the old system is frozen, a final data load runs across, users and integrations move to the new system, the result is checked against agreed criteria, and a rehearsed rollback point stays ready if that check fails.

Data residency

Data residency

Data residency is where an organisation's data is stored and processed, and the rules — a law, a regulation or a contract term — that can tie that storage and processing location to a particular country or region rather than leave the choice open to whoever runs the system.

 End-of-life software

End-of-life software

End-of-life software is a product or version its vendor no longer supports: it stops receiving security fixes, bug fixes and compatibility updates from that vendor, and formal help desk support for that version ends on the date its own lifecycle page sets.

 Point of sale

Point of sale

Point of sale, or POS, is the system a store or outlet uses to record a sale, take payment through a connected terminal or provider, and pass the result to inventory and accounting so that stock levels and takings update without a second manual entry anywhere else.
Product information management
Product information management

Product information management, or PIM, is one system that holds a product's attributes, variants, translations and media, and feeds that same record out to a store, a marketplace listing and any other sales channel, so each channel shows consistent data instead of its own separately maintained copy.

Regression testing

Regression testing

Regression testing is a type of change-related testing that detects whether defects have been introduced or uncovered in unchanged areas of the software. In practice it means re-running existing tests after a fix, a new feature or an update, to show that behaviour which already worked still works.

 Data processing agreement

Data processing agreement

A data processing agreement, also called a data processing addendum and often shortened to DPA, is the contract that binds a processor to a controller's instructions when the processor handles personal data on the controller's behalf, as Article 28 of the EU General Data Protection Regulation requires.

 Discovery phase

Discovery phase

The discovery phase is the time-boxed first stage of a software project, run before any build work is committed, in which a team settles scope, users, risks and architecture options into a plan: a brief, a backlog, an estimate range, or a decision to stop.
Enterprise resource planning
Enterprise resource planning

Enterprise resource planning, or ERP, is one system of shared records that runs a business's core operations together: finance, purchasing, stock, sales, production and people, each module reading and writing the same underlying data instead of five disconnected tools that disagree with each other.

Legacy system

Legacy system

A legacy system is a system the business still depends on that has become hard or risky to change: its platform may be out of vendor support, few people may understand it, and its tests or documentation may be missing. Age alone does not make a system legacy; dependence plus the cost of change does.

 Multi-tenancy

Multi-tenancy

Multi-tenancy is an architecture in which one deployment of an application serves many customer organisations, called tenants, with each tenant's data, configuration and access kept apart from every other tenant's, even though they all run on the same underlying system.

 User acceptance testing

User acceptance testing

User acceptance testing, or UAT, is the activity in which the buyer's own users check a release against agreed acceptance criteria, in an environment close to production, before the buyer accepts it. It comes after the supplier's own testing and answers a different question: does this work for us, not does it run without crashing.
Data migration
Data migration

Data migration is the one-time move of records from a source system to a target system, including selecting what moves, transforming it to fit the new model, and proving on evidence that the move was accurate and complete, so the source can finally be retired.

E-invoicing

E-invoicing

E-invoicing is the issuing, sending and receiving of an invoice in a structured data format that software can read and process automatically, rather than as a PDF or paper document that a person has to open and key in by hand; many markets now require it for some or all business transactions.

 Headless CMS

Headless CMS

A headless CMS is a content management system that stores and organises content through an administrative back end but has no built-in front end of its own; instead it hands content to whichever websites, apps or other channels request it through an API, leaving presentation entirely to separate front-end code.

 Nearshoring

Nearshoring

Nearshoring is outsourcing work to a supplier in a country close enough that the buyer's and supplier's working days overlap for most or all of a normal business day, and that travel between the two is practical, rather than a fixed distance in kilometres.
Outsourcing
Outsourcing

Outsourcing is the practice of contracting a supplier to carry out a defined piece of work that a company could otherwise do itself, so that the supplier, not the buyer's own managers, owns running it and delivering the agreed result.

Proof of concept

Proof of concept

A proof of concept, often shortened to PoC, is a small, narrowly scoped piece of work built to show that a specific idea or technical approach can actually work before a team commits real budget to building it properly, with no intention of running the result in production as it stands.

 AI agent

AI agent

An AI agent is a system that is given a goal and a set of tools and then decides for itself which tool to call, in what order, and when it has finished, instead of following a route that a person wrote down in advance; the same case can take a different path on two different runs.

 Fine-tuning

Fine-tuning

Fine-tuning is the process of taking a model that was already trained on a broad task and training it further on a narrower, labelled set of examples, so it adapts its behaviour — tone, format or task-following — to a specific use without learning new facts from scratch.
Minimum viable product
Minimum viable product

A minimum viable product, or MVP, is the smallest version of a new product that still lets real early customers use it and give feedback, built to test whether an idea works before a team invests in every feature a fuller version would eventually need.

Technical due diligence

Technical due diligence

Technical due diligence is the structured review of a software system's assets, architecture, security, delivery practice and people, carried out before an acquisition, investment or vendor decision, that rates what was found by its effect on the decision rather than by how tidy the code looks.

 Vector embeddings

Vector embeddings

Vector embeddings are lists of numbers that a model produces to represent a piece of text, an image or a record, placed so that items with similar meaning sit close together in that numeric space; comparing the lists, rather than the original words, is what lets software find meaning instead of exact matches.

 Web-to-print

Web-to-print

Web-to-print is the software pattern that lets a customer choose a printable product's options, upload or design the artwork online, and place an order that reaches a print shop's production floor as a job, rather than as a file emailed back and forth outside the system.
Change request
Change request

A change request is a written document that asks for an adjustment to a software project's agreed scope, raised by either side once work is under way, and it has to be classified, sized and approved by a named person before anyone builds against it.

Headless commerce

Headless commerce

Headless commerce is a store architecture in which the commerce back end, the part that owns catalogue, cart and checkout, is separated from the front end a shopper sees, and the two communicate only through an API, so the front end can be rebuilt or multiplied without touching the commerce logic behind it.

 Human-in-the-loop

Human-in-the-loop

Human-in-the-loop (HITL) describes an automated or AI system that is deliberately designed to need a person's input at a defined point, so a case is reviewed, corrected or approved by someone before it takes effect, rather than the system acting on its own judgement alone.

 Service level agreement

Service level agreement

A service level agreement (SLA) is the part of a continuing operations contract that names the measurable commitments a provider makes on a running system — availability, how fast it responds to an incident and how fast it resolves one — and what happens when a commitment is missed.
Staff augmentation
Staff augmentation

Staff augmentation is an engagement model in which a supplier's engineers join a buyer's own team and take day-to-day direction from the buyer's managers, rather than the supplier owning a defined result; the buyer keeps delivery risk and the responsibility for managing the work.

Statement of work

Statement of work

A statement of work (SOW) is the contract document that narrates what a supplier will deliver on a software project: the activities, the deliverables, the timeline and the standard the client will use to accept each one, so that everything left out of that narrative sits outside the supplier's obligation.

 Acceptance criteria

Acceptance criteria

Acceptance criteria are the specific, testable conditions that a piece of delivered software must meet before the buyer accepts it, written down and agreed before work starts so that both sides judge whether a milestone is finished in the same way.

 Fixed-scope contract

Fixed-scope contract

A fixed-scope contract is a software agreement that fixes what will be built and the acceptance tests for it before work starts, so both sides agree in advance what counts as finished and what happens if the brief changes partway through.
Model Context Protocol (MCP)
Model Context Protocol (MCP)

The Model Context Protocol (MCP) is an open standard that lets an AI assistant connect to external tools and data sources, such as a database or a calendar, through one consistent interface instead of a separate custom integration for every system it needs to reach.

Offshore development centre

Offshore development centre

An offshore development centre is a dedicated software team based in another country that works as a long-running extension of a company's own engineering function, under one accountable delivery owner, rather than a group of contractors assembled for a single project.

 Retrieval-augmented generation (RAG)

Retrieval-augmented generation (RAG)

Retrieval-augmented generation (RAG) is a technique that gives an AI model your own documents to read before it answers, so that its response is grounded in current, specific information from those documents instead of only the general knowledge it learned during training.

 Technical debt

Technical debt

Technical debt is the extra future cost created when a team chooses a faster or simpler way to build something now instead of the more thorough approach, so that later changes to the same part of the system take longer or carry more risk than they otherwise would.

A proposal or a kickoff call can turn on a single word. Two teams that read "done", "scope" or "context" differently can agree on a plan and still disagree about the invoice or who fixes a defect after launch. A shared definition, settled early, keeps that argument from starting.

The terms defined so far

OutsourcingVN is operated by Netbase JSC, and each entry below is written by its editorial team for buyers preparing a brief.

How do you use a glossary entry?

The first paragraph of an entry is the definition itself, short enough to quote in a brief. What follows explains why the term matters, shows it in context, lists its misreadings, then links the guide for the decision it affects.

Do you need a glossary entry or a guide?

Looking for Good fit when Look elsewhere when
A quick, quotable definition You need to agree on one word before a contract The decision behind the word is still open
The decision a term affects You know the term and the choice it drives You have not met the term yet
How two approaches compare A term names one of two options you are choosing between One definition already settles it

How are entries chosen and maintained?

A term earns an entry when misreading it changes a decision; one concept per entry, a variant spelling or abbreviation mentioned inside it.

Definitions cite standards, primary documentation or the relevant guide, dated by when checked, updated in place when a standard changes. The methodology page explains how OutsourcingVN sources and reviews what it publishes.

Questions about the glossary

Why isn't every term linked to a guide yet? Once its decision is common enough to need one; until then, check the buyer guides for the closest answer.

Can a term mean something different elsewhere? An entry states the meaning OutsourcingVN uses for outsourced software projects; its misreadings note flags where another field differs.

Is an abbreviation a separate entry from its term? No — it is mentioned inside the full term's entry.

From a definition to a project

A glossary entry helps you read a proposal with confidence; it does not replace a conversation about your project. Describe the outcome and the decision a term sits at the centre of, and Netbase will answer through Netbase's own outsourcing-services platform. Submit a project when ready.

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