7 reasons why Outsourcing non-core competency is a good idea

Recently I visited a Passport Seva Kendra(PSK), for getting my passport renewed. To my surprise the application to be filled out online was very user friendly and completion of the whole process at PSK took me less that 3 hours. I received my new passport in under a week’s time. I remember the last time I had my passport renewed, I had to fill pages and pages of forms using pen, get multiple address proofs/ photo ID proofs attested from a notary officer, insert thumb impressions etc. The whole process was tedious, time consuming and prone to manual error.

Ministry of External Affairs (India), in an effort to reduce the manual error, turn around time and to tackle the skill/resource limitations of employees, outsourced the process of managing passport services to Tata Consultancy Services and boy, they have done a fabulous job. This is a classic case of how organizations can leverage outsourcing and focus on their core competencies to improve their bottom line and increase their market share.

I was thoroughly impressed with the digital transformation undertaken for passport services in India. More than 88 PSKs catering to the passport services on the Indian citizens are currently under operations. Even though the ultimate authority lies with the Passport Officer, the ease of verifying document, filling passport applications etc. have made the whole process more user friendly and quicker. This goes to prove that outsourcing is an excellent option if certain functions of an organizations are not key competencies.

The key advantages of outsourcing are:

  • Focus on core competencies of the organization
  • Increase efficiency of non core functions
  • Hire skilled help for non-core functions
  • Transfer of business risk
  • Improve customer service and turn around time
  • Cut cost on owning infrastructure
  • To stay ahead among your competitors

Thes are the 7 broad advantages of outsourcing services to a vendor. However, the decision whether to outrsource the product/services has to be taken after carful consideration and analysis of your present state of business, future goals of the business and the resources availibility. A carefully thought decision must also be taken to finalize the vendor to whome the organization wants to award the contract.

Please feel free to add your ipunts in the comments section.

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