Where do you fit in the outsourcing puzzle?

There once was a time where owning your own departments in every available business function was seen as a badge of honour for larger companies. With growth came new departments, and with new departments came biddable staff with skills in a certain field. The ultimate destination being your own tower block with tidy little packages of payroll, advertising, IT services, marketing and even tea ladies.


However in today's business world there is a rumbling tectonic shift. In my last job I was working at the sharp end of outsourcing with a UK IT services company. It opened my eyes to what is an increasing trend towards dissolving small, isolated components of a business which are not the core competency of the organisation and replacing them with a far more manageable alternative.


Now in many ways this makes perfect sense, why bother furnishing an office, recruiting staff, training them, and moulding them into the company "fit", only to find that 2 years down the line they aren't quite what is needed. In this case you will be left with a significant overhead that might not be pulling its weight. You wouldn't dream of trying to build your own mobile network to keep you in the loop, the result would be a horrible mess of cups and strings that would invariably be a waste of time. So this begs the question, why try to build your own IT department or marketing team from scratch?


No doubt the prospect of outsourcing whole business functions to specialist providers will put the wind up some business owners. Of course it can be a double edged sword, the providence of the provider is likely to be key to your success and growth and you have to be ready to put parts of your business in their hands. But on the flip side, that leaves both of your hands free to delve into the core competency of what your business actually does. 


You probably already outsource things like telephone lines, maybe even data backup. What could be next for you and your business? This isnt just a persuit of big business either; BusinessWeek's Mohanbir Sawhney spins the outsourcing trend as an hourglass model with the majority of shift occurring at the top and bottom of the company size range. Some more savvy Entrepreneurs have coined the phrase of "Transformational outsourcing" where the somewhat stigmatised trend of outsourcing functions of Western organisations to India or China can infact be embraced in order to vastly improve efficiency, http://tinyurl.com/2t6qc3 (well worth a read).
I have been following CIO's trends for 2010 and looking back many of their suggestions have rung true (http://tinyurl.com/ycamjqo).


My guess is that within a few years we will see a good deal of consolidation into specialist areas with non-specialist business functions being pushed aside and picked up by someone else who cant get enough of delivering your tea or fixing your IT problems. 


The real question is, will this shift bring a much heralded new age of efficiency, or will it stack a house of cards just waiting for a gentle breeze?