In Print: Outsourcing Without Compromising Total Involvement and Control1 Dec, 2010 By: William Gindlesperger, e-LYNXX Corp. Response
Outsourcing as a business strategy began gaining prominence in the late 1980s and early 1990s as organizations began looking for ways to diversify to compete globally and to trim costs. Both were accomplished by contracting with a firm that specialized in a service that the buyer either was not set up to perform or could not perform as cost effectively as a vendor.
A direct mail producer/user, for instance, can develop concepts, but it probably is not equipped to design and print the actual mailing. Outsourcing that type of work makes sense even to the point, for some, of basically contracting with a marketing or advertising firm to provide a turnkey solution and delivery of the final product. The buyer provides guidance but not day-to-day, hands-on involvement. Accounting, legal counsel, human resources and building maintenance are among a host of other disciplines that are popular to outsource.
Outsourcing Spurs Innovation
When buyer organizations began outsourcing some of their core competencies, outsourcing was escalated to what is called a strategic partnership. Information technology and customer service often are outsourced as strategic partnerships but the distinction between outsourcing and forming a strategic partnership can be opaque depending on how the buyer organization defines its core competencies.
According to the International Association of Outsourcing Professionals, outsourcing is increasingly recognized by businesses, universities and economists worldwide as a critical management science. Not only are the latest developments in outsourcing helping companies reduce costs, but they are spurring innovation. Spending for outsourcing in all business activities has continued to climb at 10 percent to 20 percent for the past decade.
In addition to gaining competitive advantages, outside expertise and cost reductions, outsourcing can enhance quality, reduce risk, avoid staffing issues and establish vendor contractual obligations. On the negative side, outsourcing can dilute the buyer’s hands-on involvement, shift control to the vendor and not fully utilize the buyer’s institutional knowledge.
However, by using new technology, a buyer today can gain the advantages of outsourcing without experiencing the negatives. This is possible because of patents that were issued in 2002, 2008 and 2010 that provide the foundation for a competitive procurement environment in which vendors bid to win work by offering discount pricing of 25 percent to 50 percent as they schedule that work to fill their production gaps or downtime.
This strategy is further enhanced by vendors now being able to eliminate price precedent. By eliminating price precedent, vendors can be allowed to bid high, low, or not at all with no repercussions on their receiving other work to price for which they are qualified.
Driving this advancement in procurement is a unique communications and workflow system that requires full interaction and documentation between the buyer’s team and the vendor’s team. Hands-on involvement is not minimized and control by the buyer is strengthened rather than weakened.
If the direct mail producer/user were to use this system, the designer would put into the system theme ideas, layout suggestions, photos, etc. Input is instantaneous in the system’s self-contained and E-mail free environment. Should an art director with the vendor want to comment on draft layouts, that is possible with those remarks being available to all who have been granted access for that phase of the project.
Every task is benchmarked, and whoever is responsible for that task must verify changes, its completion and make notations as needed. Because all actions are available for everyone who is given access to see, the total process is 100-percent transparent.
Outsourcing may be a misnomer for this type of interactive teamwork between the buyer and the vendor. This new approach is a procurement alternative that proves innovation can have positive bottom line results without the negatives that are commonly associated with outsourcing. ■