As a corporation, it’s important for you to be aware of your strengths and weaknesses. Then, with this knowledge, you can opt to do what you are good at and pay another company to do what you are less good at. It’s the smart way to do business. For example, one area that you may not want to deal with is the warehousing of your inventory and finished goods. If your home office is located in Texas, you can make use of a Texas Contract Warehouse or a Houston 3PL (third party logistics) warehouse. If you are in California, try a California Contract Warehouse.

In the past most companies considered it to be good business to set up the business and do all work within the company. The founders of the corporation would decide on the products to be sold and would create the product designs. This is the core of the corporation. Another core activity is sales. The sales force needs a strong loyalty to the company and the product and a deep knowledge of the product.

Over time, it was discovered that a corporation could be leaner and meaner if it concentrated on these core departments. That meant that maybe someone else could do some of the work better and more efficiently. Two terms apply to these types of tasks: outsourcing and outside operations.

One department that a company can outsource is human resources (HR). There are many companies that specialize in handling the benefits for a company. These companies can help other companies to choose the best medical and other insurance for the lowest cost. Other HR-related tasks include processing the payroll. For hiring new employees, recruiting companies are available.

One more area can be outsourced is information systems (IS) or information technology (IT). In this area, too, professionals who specialize in network setup and maintenance can give a company excellent service.

Outsourcing software development and technical support to companies in foreign countries is a newly popular strategy. This solution is attractive to companies because these foreign employees can live well in their countries on less money that is required for domestic employees. (However, domestic workers suffer deprivation when this work is no longer available to them.) Two disadvantages of this outsourcing to foreign countries are the time difference and the language barrier.

Outside operations are often needed by the manufacturing department. If the company is manufacturing its own product and has not outsourced the manufacturing, there may still be some manufacturing processes that they can’t perform or choose not to perform. In this instance, the partially finished material is sent to a vendor, who then works on the material. One example of an operation that is often performed by an outside vendor is heat treating.

Finally, the corporation may not want to run their own warehouses. Or maybe they have some warehouse space but may need additional space at certain times of the year. These companies might have to make use of contract, or 3PL, warehouses.

Theoretically, a company could consist of only the core departments, with all other tasks being outsourced.