Outsourcing your Business Segments Core vs. Non-Core

Outsourcing simply means to let an external company take care of some of your business segments that you may feel you lack the ability to perform optimally. The reasons can range from requirement of expensive technology, experienced professionals, or simply because you have a lot of workload on your hands already. The prevalent idea is that businesses should outsource their non-core activities, like payroll management or human resource training, and keep core activities in-house such as research & development or financial planning. However, haphazard decisions for outsourcing can cause you to gain much less than the potential that outsourcing has to offer.

Why you can and should both core and non-core activities?

Outsourcing companies exist for the sole aim of helping in your productivity, growth and profits. This does not limit their efficiency for any specific core business segment, and doesn’t improve their usefulness beyond a certain stage for non-core activities. Therefore, your decision to include outsourcing should entirely be based on your goals for your business in general and different departments in particular. Additionally, the distinction between core and non-core activities is now outdated as well. This means that you should choose whichever departments you may feel need an extra dose of push and be done with any other distinctions.

Make Outsourcing Part of your Overall Operations

You need to define the strategic strengths of your business and then use outsourcing to gain competitive advantages and as well as internal improvements. To do so, you need to decide which activities will bring more value to you if you keep them in-house as compared to the advantages you stand to gain by hiring external help. For instance, if you are working on a new product and your main aim is to improve the functionality of your product, you will be better off by keeping the suggestions and ideas of improvement in-house but you might want external help to gain market research and expectations of your current and potential customers from the product in concern.

How to choose from both core and non-core segments for outsourcing?

First of all, if you are a small or medium sized business, you should consider getting as much help as possible. One of the biggest disadvantages that smaller businesses experience is the cost competitiveness when compared to larger companies. Outsourcing can help you massively in reducing your costs. Then, there is the obvious challenge of matching the skills and qualifications of your workforce to those of the bigger businesses. Same goes for technical capabilities. Now you can get the best of employees and the latest software in-house, but that will be much costlier than simply taking on board an external company.

 

Second point is a little more complicated. This is for the departments like call centers, payroll management, or other segments that involve dealings with people. Irrespective of the size of your business, it is advisable to allow an external party to manage your business relationships. The chance of grievances regarding bonuses or raises are likely to be much less if these are not perceived to be due to personal choices of the senior employees and simply letting a BPO company manage salaries and payrolls can do the job for you. Same goes for customer care. With call center options that the outsourcing companies provide, you gain access to qualified personnel dealing with customers from a broad range of industries so they know much more about customers’ trends, complaints, expectations, and so on. The loyalty of your clients is also not dependent upon such communication if it is being done by external parties.

 

Finally, outsourcing is not just about capitalizing on opportunities, rather also to avoid risks and potential pitfalls. This is especially true for legal and accounting outsourcing. While it may be enticing to keep your financial details and legal matters completely under your control and within the four walls of your head office, the fact that a single mistake in preparing legal contracts or financial statements can lead to enormous losses – financial and otherwise – is enough for many smart businesses to avoid the risk altogether. These outsourcing companies employee qualified personnel dedicated to the departments they are working in which makes them much more efficient and less prone to mistakes than your in-house employees. BPO companies also invest in better technology since for them such business segments form the core and strategic departments, unlike them being auxiliary activities for your company.

Conclusion

Outsourcing is essentially your tool to gain advantage over your competitors, both in terms of cost and product quality. This means that you get to decide that in which departments you could use cost savings and in which segments you are in dire need of better resources. A good BPO partner works as an extension of your own business keeping their operations in harmony with yours, allowing you higher efficiency, flexibility, and better services, and we at Intersoft BPO promise exactly that. Keep in mind your strategic areas and include outsourcing for all departments that can add to the potential of higher growth and profitability.