Outsourcing Business Activities: Does Core Versus Non-Core Matter?
Among the reasons prompting decision makers in small businesses to hire virtual assistants, one of the most common is to minimise the time spent internally on non-core business tasks.
There is no doubt that this is a very good reason to outsource, but it’s not always readily apparent what “core” and “non-core” really mean.
That’s why we decided to publish this short guide to identifying activities to outsource. It covers a few things to know if you plan to outsource for this particular reason, beginning with how to identify which of your business activities can be categorized as non-core—or better still, can simply be assigned to your outsourcing list without the application of a core/non-core label.
The Dangers of Core/Non-Core Categorization
It may actually be time for businesses to stop thinking in black and white terms about core and non-core tasks because, in reality, it’s not at all easy to draw clear distinctions between the two labels.
For example, if “core” means that activity adds value to your business, then human resources (HR) management is a core task because, without the ability to manage employees and employment, your business is unlikely to go very far.
On the other hand, you might define “core” as a key competency underpinning the reason for your business’ existence. In that context, if your business is saying, software development, you can hardly classify human resources management as being a core activity.
So… should you outsource your human resource management activity or not? The answer is far from obvious. This dilemma perhaps explains why businesses don’t always get it right when deciding which activities to retain in-house, and which to outsource.
An Alternative Approach to Outsourcing Decisions
The good news is that there is a more effective way of deciding which activities can be outsourced to benefit your business. Instead of thinking in terms of core and non-core, try evaluating your activities against the following criteria…
- Does the activity provide your business with an advantage over your competitors?
- Is your business equipped with strong internal capabilities to perform the activity?
Taking the hypothetical case of HR management in a software development business as an example, you might first consider whether the management of HR practices drives competitive advantage. In itself, it probably does not, since your competitors presumably have the same employment responsibilities.
Perhaps though, by practicing superior HR management, you could acquire and retain developers that are more highly skilled than those of your competitors, hence giving you a competitive advantage.
Therefore, if your business has strong HR capabilities, it would make sense to keep human resources management in-house. If the strength is not present, you are probably limited to basic HR management practices, with no particular competitive advantage, making outsourcing the preferable approach.
By outsourcing HR management, or some elements of it, to a virtual assistant with HR skills, you will be able to divert internal resources to focus on other activities that do drive competitive advantage.
This evaluation of competitive advantage and internal capability saves you from the rather subjective decision about whether HR (to stay with our example) is a core or non-core activity and instead helps you to look objectively at the choices in front of you.
Activities to Consider for Outsourcing
Hopefully, the example above illustrates how subjective the topic of core versus non-core activities can be, and why it might be worth taking our suggested approach as an alternative way to decide which tasks to outsource to a virtual assistant.
If you’d like some slightly more pointed guidance as to tasks you might consider as valid targets for outsourcing, you could try using our suggested approach to assess the following activities:
- Bookkeeping and accounting
- Customer service or support
- Website development
- SEO research and optimization
- General administration
- Calendar management
- Telephone answering services
- Lead generation
- Mobile app development
- Research and reporting
- Market research
- Social media management
- Technical services/support
- Marketing campaigns
The list of tasks and activities above may be quite comprehensive but is far from exhaustive. As the virtual assistant industry continues to mature, the range of service specialties continues to grow. That of course makes it even more important to evaluate all activities in your business to determine if you might benefit more from outsourcing them.
Outsource What Makes Sense
You really don’t have to pigeonhole your business tasks into categories like core and non-core. Where activities have the potential to help you compete more effectively, and your in-house resources are of a high capability, retaining those activities as internal services will make the most sense.
On the other hand, if you believe you can access superior competencies externally and/or the activities concerned offer little in the way of competitive advantage, the benefits of outsourcing to a virtual assistant will probably outweigh those of keeping the tasks in-house.
The right formula will differ from business to business, so the most important thing is to analyze the pros and cons of insourcing versus outsourcing thoroughly, on a task-by-task basis, and using an objective method of evaluation.