If you’re running an organization, sooner or later you’ll be asking yourself just what exactly is your business good at?

Are you good at marketing? Sales? Manufacturing? Purchasing? Financial administration?

If your business is good in some functions but downright pitiful in others, then it’s time to consider outsourcing.

Outsourcing is the natural tail end of the SWOT Analysis process (strengths, weaknesses, opportunities, threats). You first identify what your firm’s core competences are, as well as your core weaknesses.

Next, you strengthen your strengths, reinvesting in them and nurturing them to make them even better. Are your finance guys real wizards? Then perhaps you might end up earning more from putting your funds in investments versus reinvesting in your own business. Translation: perhaps your core strength is telling you to transform your business into a financial management firm that offers investment advice to the public!

Third, let go of your weaknesses. Ouch. Admittedly this is the most painful part of the equation, especially if it hits company pride: Your sales force is lackluster? Then perhaps it’s time to let go of your entire sales division and outsource it.

Outsourcing is typically associated with manufacturing, especially as China, with its low-cost operations, gobbles up the world’s manufacturing activities. And of course at present outsourcing is also associated with data- and voice-oriented services. But the fact is that you can outsource everything that doesn’t do too well in your enterprise.

Financial people not that good? Find a professional finance firm.

Marketing guys don’t know what they’re doing? Find a professional marketing company.

Management itself needs improvement? You can even find management firms for hire.

The battlecry here is “Focus on your strengths; outsource the rest.”

Imagine an extreme example where a company run by engineers creates great ideas, but actually fumbles in just about everything else–finance, sales, manufacturing, and even management. Can such a pathetic-sounding company survive?

Answer: yes. And if you follow our above principle, what they should do is to strip ALL management functions away from their organization and just leave behind what they do best, which is research and development. Result? You now have a pure R&D firm, which is a valid business organization. Let other people take care of everything else. This is the business model behind Dolby Labs, for instance, which does not manufacture its own products but only licenses its technologies to the more competent manufacturers.

The hard part about outsourcing is informing the organization that you will be weeding out its bits and pieces. But it’s bound to be for the better. After all, why reinvent the wheel? If someone else can do it better than you can, then let them do it for you!