Outsourcing Decisions: 3 Criteria for Outsourcing the Right Functions

On July 18, 2012, in Outsourcing, by Business Development Group
For an outsourcing initiative to be successful, a company looking to outsource some of its processes must first establish its business goals and determine which processes to outsource through the following criteria.

For an outsourcing initiative to be successful, a company looking to outsource some of its processes must first establish its business goals and determine which processes to outsource through the following criteria.

For a company to fully maximize the outsourcing strategy and reap its benefits, only the right processes to be outsourced must be outsourced. A common misconception persists that any business function that’s not “core” to a company’s operations can be outsourced. Outsourcing just about any process is almost like suicide, a guarantee for failure. This has been one of the major causes of failed outsourcing initiativesoutsourcing the wrong processes.

For an outsourcing initiative to be successful, a company looking to outsource some of its processes must first establish its business goals and determine which processes to outsource through the following criteria:

Related Articles: Six Criteria for Outsourcing the Right Processes

Core Competency

Never outsource your business processes that are directly tied to your core competency. Giving up control of these functions is like giving up control of your company and putting it in the hands of someone with very different goals. If your software is strongly connected to or deeply affects the characteristics of your “secret sauce” that defines your company and your brand, then definitely don’t outsource this function.

Related Articles: Top 5 Decision Criteria for Build versus Outsource

Cost Factors & Specialization

Non-core tasks that are not worth the cost of your time or takes up resources that can instead be used elsewhere are better off outsourced. In addition, if the tasks require high specialization or if you lack the appropriate knowledge to perform these tasks, then they are better off outsourced to someone who can do them better, faster, and with lower costs.

Related Articles: Why IT Outsourcing Often Fails

Security & Compliance

Evaluate your data security needs and determine whether outsourcing a certain business function will enable you to retain and maintain the same level of security to your data and other intellectual property. Make sure the outsourcing vendor you choose can provide the right level of data protection and encryption you need.

Many companies are turning to outsourcing in order to stay competitive in today’s market. However, just like any strategy or business approach, outsourcing can only be valuable when used properly, for the right reasons and in the right circumstances.

Related Articles: Outsource or Not? 7 Criteria to Help you Decide

 

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