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The Differences Between Core Competencies and Critical Functions

Some companies successfully outsource their core competencies, but those are few and far between. The general advice is don’t. When you are reading through or creating your company’s Outsourcing...

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Some companies successfully outsource their core competencies, but those are few and far between. The general advice is don’t. When you are reading through or creating your company’s Outsourcing Plan, it’s important to double-check the document to make sure you aren’t accidentally outsourcing the heart of your business.

Core competencies are what make your business special. They are what make you stand out from all your competition, your competitive advantage. If business were bagels, your core competency might be blueberries. Similar to the cinnamon-raisin bagel next door, but many people will prefer you.

Your critical functions are something that, as the name implies, is absolutely necessary. The flour, yeast, and salt go into every bagel. These functions can be outsourced with great success. Take payroll as an example. It’s vital for the company to function, but that isn’t what makes your company unique.

Keeping in mind what makes you unique versus what is simply important will clear up any questions about which processes you can outsource. It will prevent many major mistakes companies have made in the past when trying different business solutions.

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