Outsourcing had become quite a buzzword that is thrown around and possibly used, misused and abused as a concept. In summary, outsourcing means moving an activity to an external service provider rather than doing it within your company. There are many arguments for and against outsourcing however, in considering outsourcing, it is important to firstly consider the fundamental argument which is “What should I outsource?“. Whether you actually do it or not should be a secondary consideration.
An organisation operates according to it’s mission and its strategy and, in fulfilling its strategy, there are certain core functions that the organisation must carry out in order to deliver on its strategy. When functions are chosen to be core it is usually because the organisation has an edge in carrying them out. This means that these core functions are part of the winning formula that is envisaged to enable the company to achieve. Such functions are typically not what one should consider outsourcing since, in outsourcing these, you would be giving up the soul of the company and the core strong areas.
In working to achieve the mission and in executing according to its strategy, there are a number of other functions that need to be carried out in order to support these core activities. Such functions are typically prime contenders for outsourcing since they tend to remove the company’s focus from the core activities and they are also functions that an external company can possibly deliver better, cheaper or faster.
The discussion on what should be outsourced should essentially ensure that a company is left with a well-oiled machine that is smooth in operation, competitive, efficient and that provides a pleasant customer journey. Outsourcing is not a magic solution to everything, and there are situations where outsourcing is actually not a solution at all, however it can deliver great benefits such as focus, cost savings, increased technical input and greater competitiveness. In working with our clients, we are able to guide them through the analysis of their business and of the market in order to take outsourcing decisions and drive these benefits to our clients. Please contact CMG Consulta should you want to initiate such discussions.
