Successful business performance will be achieved by structuring the business to meet customer expectations. Managing outsourced business processes is the key in providing competitive products or services and, along with managing the core activities, will determine the success of organizations in achieving competitive excellence. The article provides detailed insights into how an organization should develop competence and manage its outsourced business processes.

At the beginning of the new millennium, it was estimated that $120 bn of business process activity will be outsourced by organizations. The driving force behind such a substantial change in the activities, which organizations plan to undertake, is pressure arising from an increasingly competitive marketplace. Organizations have accepted that their financial performance will be judged, in part, by the added value they achieve. The key for increasing this added value is seen by many as the requirement of the management to focus all its attention on core activities.

Similar to the earlier span of management control which suggests that one manager can only effectively manage six subordinates; so it is held that a management team can only effectively manage half a dozen business activities. What is important is that core activities are identified, and the organization is developed to concentrate on their management. Non--core activities remain important to the overall success of organizations, and are best provided by specialist organizations, which make those activities central to their business.

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