IT Companies like Matrix Marketers believe that by outsourcing their non-core activities, they can improve the performance of their core activities. Retain what is core and outsource what is non-core. Pretty simple, right? It is a broad statement that doesn’t explain how a company should decide what is and is not a core activity.  To make your outsourcing strategy even more effective, the organizations have to find out the non-core activities of your organization. This clearly distinguishes between the best suited and normal activities of the company.

Make outsourcing part of overall strategy

Generic and competitive are the two main business strategies which are followed. Generic strategies are types of strategies such as growth (purchasing new assets), globalization and entering new markets, and retrenchment (concentrating on what you do best). Competitive strategies deal with differentiating products and selling goods at lower prices.The main consideration while outsourcing is to decide and check that what is to be outsourced and how the overall efficiency can be improved.

Leave behind the core/non-core distinction

When you decide to outsource the work, you need to adopt the modular approach by dividing the number of tasks in smaller tasks such that core activities can be differentiated and we exactly know what to outsource. The core activities are important as they are strategic and responsible for end results. At the same time, the number of non-core activities are more and termed as the daily tasks that are time consuming but add very little to the final output. On the other hand, you can’t even neglect these activities as they are required to be completed for the project completion. In fact, dividing the entire project into core / non-core activities won’t be helpful. If you see the latest trends, dividing the project into core and non-core activities are outdated. Now a days, we evaluate the project on the basis of knowledge management. Ultimately, the project manager should decide which activities are to be outsourced to third party. There is no solid framework and straight forward strategy on which the distinction can be made.

Define what is strategic and internal

According to experts it is more helpful to decide which activities deserve to be outsourced by evaluating:

(1) the likelihood a task will bring competitive advantage (strategic) and
(2) the strength of internal capability for conducting a task (internal).

The above strategy will help in taking the final decision to find the internal tasks to be done. This should bring the maximum outsourcing value.

Similarly, if the in-house capability to complete a task is more than the decision to accomplish in-house should be immediately taken irrespective of its time taking process, If the company finds that the company can’t accomplish this task in-house then it’s better to outsource the task and so on.

Beware of pitfalls – outsourcing is not a panacea

The consideration between competitive advantage and internal capabilities seems to be an optimal lens through which to determine potential outsourcing activities. This approach avoids the comparison of core/non-core divide since all tasks are considered essential to the company. Nevertheless, caution should be employed. When using this approach, companies should be aware of potential interconnectedness of some of the tasks. Outsourcing has its own importance in helping the business to grow. It should not be treated as the substitute for internal capabilities. The companies like Matrix Marketers shouldn’t “forget” their own capabilities as a result of outsourcing. That can potentially lower value, rather than raise it. The companies must be aware of the latest changes and developments within their business. At the same time, they must not neglect the marketplace and how it affects their business processes – for example, latest technologies might not be readily accepted by the market.

Conclusion

By the above discussion it must be clear to you that what to outsource and what not? To summarize, we would like to say that the outsourcing should addon value to the organization. The outsourcing of entire project can be done but a continuous monitoring is required. At the same time, outsourcing helps to achieve the goal of doing global business. This also helps other companies to go which are taking outsourcing tasks, if the process is seriously taken.