Outsourcing

Need to know

What you need to know

• Outsourcing involves contracting a business function to an external provider.
• Core competencies are the unique, value-adding activities a firm excels at.
• The primary rationale is to allow a business to focus on its core competencies.
• Non-core activities (e.g., cleaning, accounting) are typical candidates for outsourcing.

Explanation

Outsourcing

1. Outsourcing involves contracting a business function to an external provider.
2. Core competencies are the unique, value-adding activities a firm excels at.
3. The primary rationale is to allow a business to focus on its core competencies.
4. Non-core activities (e.g., cleaning, accounting) are typical candidates for outsourcing.