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The Outsourcing Continuum: Setting Your Sourcing Strategy

  

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Scott Draeger, M-EDP
Customer Communication Strategist
HP Exstream

In today’s multi-channel world, many leading businesses are struggling to deliver compelling customer experiences across a growing mix of consumer touch points. Today, most businesses have cobbled together an odd combination of outsource providers, design agencies, and internal teams to execute their communication strategy.

In this article, we will look at the different types of communication outsourcing options that are available today for print and electronic communications. Then, we will raise some important questions that could help you to optimize your current and future customer communication sourcing strategy.

How did we get here?  

In the 1980s and 1990s, customer communications were fairly simple, and whether to outsource customer communications was a basic “yes or no” decision.  This worked fairly well until the mid 1990s, when a convergence of technologies expanded the frontier of customer communications.

During this time, the fields of colour print technology, global data transmission, finishing equipment, communication design software (then VDP software), and business thinking made some major advances.  The CRM industry also gained traction during this period. Despite these major shifts, many businesses kept their same sourcing arrangements in place.

The outsourcing continuum

The decision to outsource requires an understanding of the effort, control, and cost that you expect from each of your projects. It also requires deep knowledge of the business objectives of your customer communication projects.

Today’s software technology empowers marketing, legal, design, and copywriting teams to create, edit, and implement changes to customer communications across all channels with instant implementation, even when significant portions of the project are outsourced.

When you think about your entire customer communications strategy, it’s important to include all of the projects that communicate with customers. At a project-level, and at a strategic level, you should assess your ideal sourcing arrangements. There are five basic categories of outsourcing that are available:

• In-House Operation owns the entire production process, including print capabilities within the business. This includes design, testing, implementation, and physical production. At low volumes, correspondence and quotations are executed and sent from the business’s mail room. At high volumes, some projects generate billions of full-colour pages per annum.
• To the Factory outsourcing keeps everything within the business except final production. These businesses generally create, design, and deploy an entire customer communications solution. They own their software and generate their own print files, and then transmit the files to a dedicated Document Process Outsourcer who physically produces and delivers the communications.
• To the Data Centre outsourcing allows businesses to own the entire design process, but does not require ownership of the capabilities to produce print-ready files or produce physical output. Businesses in this model might not own full licenses for Customer Communications Management software, but they do own design capabilities.
• To the Designers outsourcing is centred on the concept of a tight partnership between the outsourcer and the business. This model creates a rigid design architecture that is co-operatively developed between the business and the outsourcer. After the architecture is established, the business can update and edit certain areas of the applications from a web browser.
• Totally Outsourced is the extreme position for businesses who see customer communication as a non-core activity. In this model, the design is completely guided, created, and owned by the outsource provider, starting with some powerful, industry-proven templates.

What should we consider?

When a business chooses to outsource a customer communication project, there are many aspects that need to be understood before the final negotiation, which is usually conducted by the purchasing department. Before you let it move to purchasing, you must fully describe the project and its importance to the larger strategy before it can be effectively outsourced. Otherwise, purchasing may agree to terms that save money at the expense of project success. The following questions might help to define these considerations:

• Are you (and only you) the expert on the content? The harder it is to explain the legal and marketing complexities that drive your communications, the more difficult you will find outsourcing. You might want to outsource to the factory.
• Are you an expert on the specific channel technology? If you don’t know about a new technology, hire an expert and totally outsource it until you gain experience. This is the default decision for many microsites and multi-touch campaigns.
• How often do you redesign communications? If you redesign things every morning, you will find it expensive (and frustrating) to outsource designs.
• How often would you like to refresh messages on the communication? If you constantly make minor text and graphic modifications, consider outsourcing to the designers. They can give you access to content editing tools.
• How important is the communication to the business? If the communication is critical, and your competition is fierce, you might want to operate an in-house project. This way, you can immediately implement radical adjustments.
• Do you see communications as a differentiator? If you do, you must have a solid sourcing strategy that matches the unique needs of your business.

With all of the technology available to create, produce, and deliver your customer communications, you can easily support your strategy. With all of the sourcing options available, you can certainly develop an execution plan that delivers a unified customer experience that your competitors cannot match.

Scott Draeger, M-EDP recently moved to Sydney to become HP Exstream’s Customer Communication Strategist for the Asia Pacific region. This move immediately follows the completion of the HP Exstream’s Design & Production version 8.0. He graduated from the University of Nevada, Las Vegas, and has worked in the digital document industry for 15 years. In 2007, he earned an International MBA from Lake Forest Graduate School of Management, and joined HP Exstream as the Product Manager for the HP Exstream Design & Production product during the 7.0 Development cycle. In 2009, he became the Manger of Product Strategy for the entire HP Exstream software portfolio. This included the definition, development and release of the 8.0 portfolio.  In 2010, Scott earned his M-EDP (Master Electronic Document Professional) designation from Xplor International. In 2011, Scott earned Xplor’s coveted “Chairman’s Award” for participation in the organizations efforts to deliver vendor-neutral continuing education in the customer communications and electronic document industries globally.