Dominating a market is a function of being able to deliver more performance than your competitors on the basis of competition. And doing that depends upon being able to closely integrate those elements in the value chain that drive performance along the relevant dimensions. Whatever does not drive that performance can be safely outsourced.
It is not enough to get this analysis right just once, however, because the basis of competition changes over time…Making the shift to delivering improvements in a different dimension of performance can require reconfiguring your value chain, bringing back in- house processes that once were outsourced, along with their associated IT infrastructures, and vice versa. It is the need to respond to these changes that makes outsourcing decisions more complex, more subtle, and more challenging than they first appear…And so, when it comes to structuring outsourcing deals, agreements must recognize the inevitability-but unpredictability-of these shifts and incorporate a means of responding.