Conclusion

Using the sword and gun analogy referred to earlier, it is reasonable to picture the conventional non-core internal function as the sword department. It has been around a long time and it is under growing pressure from those that argue that it is out of date because it confuses the importance of key processes. In addition, further attempts to improve performance do not appear to justify the collective effort made.

Against that the concept of externalizing to a specialist provider could be likened to the gun – it is a relatively new idea and is capable of continuous improvements. Why then should anyone persist with the sword when they could have the latest high tech gun?

One very good reason is that you might get the outsourcing version of a gun that is difficult to understand, where there is no manual and the help desk has continuous routing problems. In such circumstances it would be unpleasant to see your competitor approaching with a sword.

Nevertheless, the gun now exists, therefore you need to consider future options very carefully.