Steve Downton, Downton Service Management Consultants Ltd, Noventum Group
Similarly logistics service providers who not only transport, repair and procure parts cost effectively, but will even fund the Inventory and in effect provide a leased part. As a result, the solutions are focused on delivering tangible visible bottom line benefits and not just a single skill.
Once one non-core capability is outsourced, then the question of which one next, and how many departments can be outsourced? If a whole host of capabilities are outsourced, then managing the outsourcers becomes a required skill and one that probably does not exist internally. To cover this requirement, there are fully managed services offerings - sometimes referred to as Fourth Party solutions - where the Fourth party manages the third parties.
How is a core competency defined if all the critical areas are outsourced; what is core and how is the business actually structured? As businesses change their shapes, and capabilities change dramatically, and often very quickly, there is a danger that what was once critical becomes core and has to be treated accordingly. For example, who would have thought 10 years ago that Supermarkets would be offering highly competitive banking and insurance facilities or Building Societies would have coffee shops within their branches? What further changes are in the pipeline that we are likely to see and how might they affect our opinions on critical and core competencies?
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