Friday, March 27 2015
Thinking of your company as a collection of orchestrated vendors offers a useful and powerful perspective. All businesses engage an array of third-party providers to deliver products and services to our employees, and ultimately to our customers.
Vendors install our computers, power our networks and heat our buildings. Vendors conduct background checks on new hires, balance our accounting entries and build out office space. Coordinating vendors is a primary business function. It’s something that all owners and business managers do. A properly assembled and managed team of vendors provides the resources a business needs to create economic value and profits. Vendor decisions are akin to partner decisions, and all companies need good partners in order to thrive.
Another decision all owners and managers have to make is deciding what they want to be good at. Every business has to offer an expertise. Core competencies distinguish a company from its competitors and demonstrate value to a customer. They are the decisions of in-house expertise, and define the pursuits on which resources will be spent. Deciding what you’re good at makes it easier to evaluate what’s better to outsource to others. Competencies that generate revenue, for example, are most often commanded in-house. After all, creating the magic that generates revenue is a primary driver of success. Businesses tend to internalize competencies that maximize revenue generation, and also those that minimize total expense. Any competency that can be made stronger by outsourcing - either by revenue generation or expense reduction, will ultimately increase the bottom line. It is powerful to view a company through the lens of core competencies, because this perspective enables a manager to decide where to allocate resources.
What do you want to be good at, and where are you better served by having someone else shoulder the burden of a non-core function? Why should a business overspend to command expertise for a function better managed by others? The answer, of course, is that it shouldn’t.
In our view, property tax management is one example of a non-core function that should be outsourced. Managing property taxes in-house is an expensive allocation of resources, because hiring and maintaining a high-quality staff across multiple taxing jurisdictions is both costly and time-¬consuming. Appeals settlement expertise requires resources and data best deployed by a business that already has these core competencies in place. A business like Cold River Land. Outsourcing a process like property tax management enables a business to better focus on strategies that maximize revenue, while allowing a trusted vendor to minimize expense and maximize savings and refunds.
Knowing how to prioritize partnerships is important in good vendor management. And knowing how to prioritize core competencies is critical to maximizing profits. Decide what you’re going to be best at, and then outsource secondary competencies to others.
For more information about Cold River Land's property tax management service, click here. For a slideshow presentation of our services, click here.
Bob Koncerak is president of Cold River Land, LLC Published 3/23/15