Jan. 24, 2013
-- Outsourcing non-core but business essential is not a new phenomenon in business world. In-fact the very purpose of outsourcing is to ensure best practice in key business components such as data processing, supply-chain management, warehousing, logistics, HR, accounting and other vital processes. While cost savings from the outsourced function is one reason, more & more companies understand that it is better for business that certain key functions are handled by experts that work as an extended arm for the businesses.
This was the theme of discussion, when a group of 100 entrepreneurs, met at Palm Court, New Delhi, on 23rd January 2012. Entrepreneurs, Owner of micro, small & medium sized units in & across NCR (National Capital Territory) stressed that in order to have increased focus on core business operations and developing competitive advantage at times leaves them 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 etc.
Speaking on the matter, Mr. Vikram Kushwaha CEO of Royal Consulting Services, a recruitment firm added, “What is core for one at time is non-core for another. Like in my case, most of my services are non-core for many present here. It is in these areas that outsourcing is bound to help. Not one does it leave business owners concentrate more on core business issues, but also help reduce inflationary cost structures that otherwise businesses tend to raise.”
“In-fact, non-core business process is now starting to contribute to the bottom line by being outsourced.”
added head marketing & client Services of WyzMindZ, a managed services company with head-office in Bangalore. “The "core/non-core"
definition is not merely distinguishing the processes that are best kept in-house from those that are best outsourced basis cost benefits, but is more to do with core capabilities of the management team as well.” He further added
The group discussed about their individual cases in detail to further substantiate that more & more small players are exploring outsourcing non-core processes as an option. Managing Director of a 150 seat strong Contact Center shared his experience of hiring an expert team for Workforce Management & Business Intelligence wing for his business, “Our productivity per person increased by 15% due to experts handling our forecasting, staffing & scheduling processes. At the same time because we are in a 24 month agreement with the experts our model in a way is non-inflationary. Furthermore, because we are a small organization, hence investment on costly tools/technologies for such processes can never be a priority. It hence becomes icing on the cake because the Managed Service model helps me with best-in-class services.”
It came out very clearly from the meet-up that out of the three categories, namely core, non-core but business essential & non-core and non-critical as well, it is increasingly being preferred by business owners to start outsourcing non-core but business essential activities. So while cleaning, catering & security, non-core/non-
critical was already outsourced by almost all, businesses are starting to outsource non-core business essential as well.
The WyzMindZ representative summed it well, “It is like saying that Logistics is a critical but non-core activity for a producer, but it is a core activity for a transportation company. So it makes business sense to outsource to one for whom your non-core is core.”