Using outsourcing effectively is therefore a great way to keep your business streamlined and functioning at the best of its competitive ability.If you’ve been around kids for a while, or have your own, you know that transitioning between activities and locations can be challenging for toddlers and preschool aged children. In fact, the market tendency is to reconsider which processes make up the core set, and to outsource even some processes previously considered as integral to the internal structure, such as accounting, tax reporting, debt collection, customer support and so on. The issue is not which processes are important or unimportant, since all functions contribute to overall performance. The "core/non-core" definition merely distinguishes the processes that are best kept in-house from those that are best outsourced. Today's competitive corporation must optimize every process to achieve the best possible business performance. Since these outsourced processes will then be in the hands of a vendor for which they are core, the chosen vendor must be the best of its type, excellent at the processes it does. Outsourcing non-core processes to vendors helps to accomplish this goal. The total number of processes that companies consider core is inevitably shrinking, while the proportion of non-core yet critical processes will continue to expand as margins in a competitive environment are squeezed and customer service becomes increasingly competitive.Ĭorporations must consider all their business processes as "mission critical," examining and optimizing them where possible. Competition and rapidly changing IT options are driving companies to realize the potential benefits of outsourcing functions and processes to parties that specialize in these areas. In other words, a non-core business process may start to contribute to the bottom line by being outsourced.Ĭompanies are currently determining which functions or processes are core to their business, and which are non-core yet critical. This notion, however, is changing as outsourced processes help companies save money or increase productivity. Although these processes are vital to the day-to-day operations of many organizations, users view them as overhead functions that do not define their business and, therefore, contribute little to their identity and bottom line. The increased focus on core business operations and developing competitive advantage has left companies wondering what to do with their non-core, less strategic processes, such as distribution and inventory management, accounting and HR, credit card processing and product testing. Examples include cleaning, catering and security. Even if performed poorly, they are less likely to seriously harm an organization in the short term, although they are still important.
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