Considering outsourcing non-core business functions? You’re not alone. Presently, 66 percent of businesses with more than 50 employees and 39 percent with fewer outsource at least some of their work, according to DemandSage. Demand is rising, and new firms are emerging nearly every day to meet it.
Commonly Outsourced Non-Core Business Functions
Non-core functions support your business but are not central to the products or services you provide. Some of the most commonly outsourced areas are outlined below.
- Accounting and Finance: Providers may handle bookkeeping, payroll processing, tax preparation, accounts payable, accounts receivable, and financial reporting.
- Human Resources: Recruiting, onboarding, benefits administration, employee records, and compliance support can be managed externally.
- Information Technology: Outside teams can provide help desk support, network management, cloud services, data backups, and cybersecurity.
- Marketing: Businesses often outsource website management, graphic design, content creation, search engine optimization, paid advertising, and email marketing.
- Customer Service: External teams can manage inbound calls, emails, chat support, order questions, and after-hours coverage.
- Administrative Support: Scheduling, data entry, document processing, research, and reporting can be assigned to virtual assistants or administrative service providers.
- Legal and Compliance: Outside specialists can assist with contracts, licensing, policies, and industry-specific regulatory requirements.
5 Proven Benefits of Outsourcing Non-Core Business Functions
While the benefits of outsourcing non-core business functions are different for each organization, a few key areas see high success rates across the board.
1. Cost Efficiency and Operational Flexibility
Outsourcing non-core functions can help you keep overhead under control while giving you more room to adjust spending as your needs change. In fact, cost reduction is the number-one objective businesses achieve through outsourcing, according to Deloitte. Standardization and process efficiency are the second.
Reduce Employment Costs
Benefits alone account for 30.1 percent of private-sector compensation costs, according to the U.S. Bureau of Labor Statistics. For those looking for cost reduction, outsourcing can eliminate this, plus lower spending on things like recruitment, training, payroll taxes, equipment, and software.
Align Costs with Your Workload
For businesses focused on operational efficiency, outsourcing delivers on a number of fronts. Depending on the arrangement, you may be able to pay by the hour, per project, or by volume, and adjust the level of support you receive as your workload changes. This gives you the flexibility to increase support after landing a large contract or adjust for seasonality, and to scale back if demand slows, so your spending stays more closely aligned with revenue and protects your margins during slower periods.
2. Access to Specialized Expertise and Technology
Developing capabilities is the third most common objective businesses achieve through outsourcing, with 70 percent reporting success in this area, according to Deloitte. It makes sense. Service providers build their businesses around a specific area, so they often have deeper expertise and more advanced tools than a small or mid-sized business could justify maintaining in-house.
Fill Skills and Knowledge Gaps
Outsourcing allows you to select a provider with direct experience in your industry or the specific issue you need to solve. For example, an experienced IT provider may offer specialists in cybersecurity, cloud systems, and compliance, giving you access to a broader range of knowledge than a single in-house hire typically provides.
Use Advanced Technology without Purchasing It
Many providers include specialized software in their service fees. This can give you access to automation, analytics, cybersecurity monitoring, and other advanced tools without purchasing licenses or managing implementation, maintenance, and updates internally.
3. Focus on Core Business Competencies
Your core competencies are the things your business does especially well and that your customers rely on you to provide. Outsourcing routine support work frees up more time for you and your team to strengthen these areas.
Gain Time to Lead and Strategize
Non-core work can still consume a significant amount of management time. Shifting these responsibilities to an outside provider reduces the time you spend overseeing day-to-day details, so you can concentrate on strategy, sales, key accounts, and improving your products or services.
Make Better Use of Internal Talent
Your employees bring valuable knowledge of your products, customers, and operations. Outsourcing allows them to spend more time applying that knowledge to service delivery, problem-solving, and customer relationships, rather than dividing their attention among unrelated responsibilities.
4. Scalability and Risk Management
Reducing risk is also a common objective businesses achieve through outsourcing, with 58 percent of respondents reporting success in this area, according to Deloitte. The firm notes that business continuity plans and diversified service delivery models are two ways organizations are reducing operational risk.
Add Capacity as You Grow
Growth can place sudden strain on your people, systems, and processes. An established provider already has resources in place and can often increase support faster than you can hire and train employees or build new systems. This makes it easier to take on more work, enter a new market, or expand your services.
Build More Resilient Operations
Outsourcing can reduce your reliance on any one employee, location, or system. Providers often use documented processes, backup staff, redundant technology, and recovery plans to maintain service during disruptions. This adds another layer of protection for your business against absences, outages, cyber incidents, and other operational setbacks.
5. Improved Business Efficiency and Competitive Advantage
For those hoping to gain a competitive advantage, outsourcing delivers here as well. In all, 59 percent of businesses report success in this goal, according to Deloitte. Combined, the benefits outlined above can lead to a business that operates more efficiently and delivers greater value to its customers.
Improve Speed and Consistency
As noted earlier, standardization and process efficiency are among the most common results of outsourcing. Established providers typically use documented workflows, automation, and clear performance targets. This can reduce errors, shorten turnaround times, and create more consistent results.
Strengthen Your Competitive Position
Customers often evaluate providers on speed, accuracy, reliability, and communication alongside price. Outsourcing can strengthen these areas by keeping operations moving consistently and giving your team more time to respond to customers, improve your offerings, and pursue new opportunities. These gains can make your business easier to choose and harder to replace over time.
How to Develop an Outsourcing Strategy for SMEs
An outsourcing strategy gives you a clear framework for deciding what to outsource, who should handle it, and how results will be measured.
- Define Objectives for Business Outsourcing: Identify the specific outcomes you want, such as reducing costs, improving turnaround times, accessing specialized skills, or supporting growth.
- Choose What to Outsource: Prioritize work that consumes significant resources, falls outside your team’s strengths, or can be separated from core operations.
- Establish a Performance Baseline: Document current costs, turnaround times, error rates, and other relevant metrics so you can measure the impact of outsourcing.
- Set the Scope and Expectations: Outline the provider’s responsibilities, expected workload, deliverables, deadlines, service standards, security requirements, and performance indicators.
- Compare Providers Carefully: Review each provider’s experience, capabilities, technology, references, pricing structure, and ability to support future needs.
- Plan the Transition: Create a timeline and determine how knowledge, data, system access, and responsibilities will transfer to the provider.
- Assign Internal Ownership: Select someone within your business to manage the relationship, monitor results, and address issues as they arise.
Additional Tips to Boost Success with Non-Core Business Functions Outsourcing
Once an outsourcing arrangement is in place, how you manage the relationship can have a major impact on the results. Keep the best practices outlined below in mind.
- Start with a Limited Scope: Begin with a defined project, process, or department before expanding the provider’s responsibilities.
- Communicate Consistently: Schedule regular check-ins, establish clear points of contact, and address questions before they affect performance.
- Provide Relevant Context: Share the business goals, customer expectations, internal workflows, and standards that should guide the provider’s decisions.
- Protect Sensitive Information: Limit system access based on job responsibilities, use appropriate confidentiality agreements, and confirm the provider’s data security practices.
- Integrate the Provider with Your Team: Include the provider in relevant updates and encourage employees to share feedback or raise concerns.
- Monitor Performance Regularly: Review agreed-upon metrics, service levels, costs, and quality rather than waiting until problems arise.
- Maintain a Backup Plan: Keep process documentation, retain access to essential data, and establish a clear transition plan in case you need to change providers.
Improve Your Resource Optimization with Charter Capital
You don’t always need to secure specialized outsourcing services to have your non-core tasks managed externally. At Charter Capital, for example, we provide free collections services on all factored invoices, saving you the time and effort of chasing payments. If you serve other businesses and are interested in receiving immediate payment for your work through small business factoring while freeing your team from the collections process, request a no-obligation rate quote.
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