Outsourcing non-core activities can allow you to focus your energy on areas in which your company has a competitive edge, while saving money on the processes you’ve outsourced.
Before taking this step, however, it’s important to analyze which activities would be ideal for your company to outsource.
For most companies, business functions fall into three main categories:
Core activities are your company’s indispensable central activities. These are the services you provide or the products you create. Delegating these essential activities to an outsourced provider would, in effect, create a competitor for your own company.
Critical but non-core activities are the strategic types of functions that can have a major impact on the success of your business, depending on how well they are performed. Activities such as marketing, information technology and logistics operations are excellent examples of the type of critical, non-core strategic functions that are vital to your company and, if outsourced, should be carried out by a capable, skilled and trusted provider.
Non-core and non-critical activities are those necessary tactical functions that would have a minimal effect on your business if performed poorly. Janitorial, payroll, security and grounds maintenance are good examples of this type of function. If you are dissatisfied with the level of services from an outsourced vendor of such non-core activities, you can find a new provider with relative ease and negligible financial loss to your company.
Typically, companies have viewed non-core, strategic functions as activities that contribute little to their bottom line. This notion is changing, however, as outsourced processes help companies save money or increase productivity, according to Sergei Tiunov, General Director of the Outsourcing Division of BDO Russia. “In other words,” he notes, “a non-core business process may start to contribute to the bottom line by being outsourced.”