Written by Jeff Keltner, SVP Business Development
Executives often face a difficult question: Which areas should a company handle in-house, and which should it outsource to partners?
This is a complex question that doesn’t have one simple answer. Every business leader will have to carefully assess the unique capabilities and limitations of their business.
As a rule of thumb, most businesses will have one or two core competencies, or areas in which they naturally excel. When it comes to those areas, the organization doesn’t have to outsource to a partner or vendor. The company can already provide consumers with a unique, top-of-the-line experience.
For other areas, however, it’s a good idea to look for ways to outsource, either by hiring a vendor or recruiting help from a partner. This article will get into what that means and how executives can identify the best strategy to take their company forward.
No business can excel in every area. That’s why it makes sense to pick one or two areas of core competence and then either buy or partner to achieve excellence in the other areas.
Providing a Best-in-Class Experience
Wherever possible, businesses should aim to provide their customers with a first-class experience across the board. In some areas, that can be best handled in-house.
Many financial institutions, for example, have a finely honed capacity for relationship management. That’s a priority for the institutions, and they’ve already invested in hiring and training employees who excel at building great relationships with customers. There’s no need to outsource that area because it’s already being handled at a high level in-house.
Of course, those very same financial institutions are probably also investing in digital tools like customer relationship management (CRM) platforms. That’s all part of what goes into building a best-in-class offering.
Buying and Partnering
No business can excel in every area. That’s why it makes sense to pick one or two areas of core competence and then either buy or partner to achieve excellence in the other areas.
Should businesses buy from providers, or should they partner with other, complementary businesses? In the end, that doesn’t matter as much as making sure customers have access to the best service and product possible.
When business leaders are looking for a partner or vendor, there are three key things to identify. Integration, configurability, experience.
Choosing the Right Partner or Provider
When business leaders are looking for a partner or vendor, there are three key things to identify.
- Integration
Any product or service businesses acquire from a partner should be easy to integrate into a common experience for the customer. The goal should always be to provide the customer with a seamless experience that can all be accessed through the business. Consumers should be able to have a "one-stop shopping" approach for everything they need, from managing consumer credit to consumer banking partnerships.
- Configurability
The offering being purchased should be flexible enough to fit into the existing business environment and the business’ broader strategy. Once it’s been acquired, it should be fully under the business’s control.
- Experience
The partner or provider should have experience working with the relevant business sector. In the case of financial institutions, it’s especially important that the vendor have experience with financial regulations, which can be confusing for those who lack familiarity.