Five Reasons to Outsource Non-core Business Functions

Five Reasons to Outsource Non-core Business Functions

Five Reasons to Outsource Non-core Business Functions

When to Outsource

As your business grows, you may need to support additional functions like a helpdesk, a content development group, a functional testing team, or even your localization management team. Critical divisions supporting your core business such as these deserve your full attention, as they can make or break your customer experience.

But allocating space, resources, budget, and personnel may be challenging or downright impossible, not to mention overwhelming when the function is not familiar territory. The solution? Outsource the whole cost center to a qualified partner.

In our experience with growing global enterprises, there are five primary reasons to outsource non-core business functions. Can you identify with any of these pain points?

1. Insufficient personnel

Often global businesses do not have the in-house staff in place to handle a non-core business function. You may need project managers, process managers, and technologists, not to mention the resources themselves, who come from different backgrounds and possess different expertise than your current resources. It could easily become a sizeable team.

On top of that, your organization may resist increasing headcount for a non-core function. Overhead expenses differ from outsourcing expenses in the view of corporate finance departments, and often there is more budget for the latter than for the former.

2. HR challenges

Your current HR department might not have the capacity to help with all the resourcing activities. They would have a lot to do: recruit, hire, train, and manage, to name a few things. Also, it’s probable that you will need to recruit resources or establish offices in new countries, which means having to comply with foreign labor laws, financial regulations, and hiring practices — which could really get you into trouble if you don’t know them.

3. Inadequate infrastructure

If you need a call center to support, for example, all the regions in which you sell your product, it’s likely that your existing offices cannot provide the global coverage required for this new function. At the same time, the cost and time of securing new real estate might make senior management cringe.

4. Budget constraints

Your organization may not want to — or be able to — allocate sufficient funds to internally support additional cost centers. Also, budgeting is difficult: the costs are very hard to foresee if you don’t have experience building a department. Outsourcing the program might be less costly than setting it up in-house, since experts can set up efficient programs quickly based on past experience. They can also suggest the best technology and team structure for your business needs. Finally, they may already have the global office network and resource pool in place, eliminating those setup costs entirely.

5. Lack of know-how

It could be that no one knows where to start to create or manage a department. And it’s not a realistic expectation: they have been hired to do other jobs. It could also be that the current staff does not have experience implementing new processes and technology.

Delegate your weaknesses so you can focus on your strengths, but take the time to fully evaluate potential outsourcing partners so that you can choose a company with the relevant expertise that you can trust. You need to feel confident that they understand your needs and how this function integrates with your core product. What’s more, they should build a comprehensive program that scales with your business, continuously innovates to improve processes, and delivers against your expectations and requirements.

 

It’s understandably hard to let go of a business function. Keeping everything in-house allows you to remain in control, and gives you high visibility into what’s happening. On the other hand, outsourcing frees up your personnel and resources for what you’re truly good at.

If you can relate to one or more of these indicators for outsourcing peripheral business needs, investigating an outsourcing partnership may be well worth it.

 

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