What happens to 'semen' on the outside?

It depends on what you mean.

If you are talking pregnancy, semen on the outside of the body is mainly harmless. It dries and that's pretty much it. There are instances of becoming pregnant from ejaculation on the outside of the vagina, but it is exceedingly rare.

If you are talking HIV/STDs, contact with infected semen is risky, regardless of where it is placed. The point of contraceptives, aside from preventing pregnancy, is to also prevent coming in contact with bodily fluids.