The Outsourcing Institute – Top Ten Reasons for Outsourcing

The Outsourcing Institute – Top Ten Reasons for Outsourcing

Some companies don’t need a reason to outsource to the experts in their field. Others feel that they can get by in their mission by keeping matters in house. All that being said, if you would like your business or organization to achieve more in any of the tasks listed below, you should consider outsourcing to the experts!

The Top Ten Reasons Companies Utilize Outsourcing

1. To improve company focus. Outsourcing sets up a framework that an outside expert assumes responsibility for. That leaves management free to focus on more important business issues related to customer service and marketplace demand.

2. To obtain world-class capabilities. Because of their specialization, outsource providers bring an extensive skill set into the corporate environment. Such leading edge technology and expertise helps companies better satisfy customers and increase productivity.

3. To accelerate re-engineering benefits. Organizations realize the benefits of re-engineering more quickly if they contract with an outside organization that is itself already re-engineered to state-of-the-art standards.

4. To share risks. Outsourcing enables management to turn over to its suppliers certain risks, such as demand variability and capital investments. Unlike the buyer, the outsourcing provider can spread those risks over multiple clients.

5. To free up corporate resources. Outsourcing permits an organization to redirect its resources from non-core activities to ones that have the greatest impact on business performance.

6. To make capital available. Contracting out certain functions as operational expenses can reduce the competition for capital, since the outsourcing entity provides the capital investment as part of its overhead.

7. To obtain a cash infusion. Outsourcing can involve the sale of assets to the provider, typically as a combination of cash and a loan.

8. To control operating costs. Access to an outside provider’s lower cost structure is one of the most compelling reasons for outsourcing.

9. To obtain resources not available internally. Outsourcing is a often viable option for companies experiencing rapid growth, expansion into new geography or spin-offs from the parent company.

10. To deal with management or control problems. Control problems are often cited as the reason for outsourcing. However, the underlying cause, such as unclear expectations or difficulty in measuring performance, is often not solved by outsourcing.

Source: The Outsourcing Institute, 2004

Jewish Marketing 101 – Harvard Business Review on Outsourcing your Marketing

Jewish Marketing 101 – Harvard Business Review on Outsourcing your Marketing


Harvard Business Review Outsourcing

Here’s a highly informative Q and A from Harvard Business Review on the pro’s and con’s on outsourcing your marketing…

Should You Outsource Your Marketing?

Most companies already outsource a portion of their marketing function—advertising. But what about direct-mail management, lead management, or customer analytics? Increasingly, expertise in these and other marketing areas lies outside your own walls. And that is why more and more companies are turning to marketing partners.

Harvard Business School professors Gail J. McGovern and John Quelch documented the trend in an article in the March issue of Harvard Business Review. One reason behind the move? While company marketing departments have plenty of talented right-brain, creative types, they may lack the left-brain analytics needed to better understand their customers in today’s information-rich environment.

Besides, argue McGovern and Quelch, outsourcing marketing can lead to better quality and lower costs.

McGovern offers a unique perspective: Before joining the HBS faculty in 2002, she was president of the Fidelity Personal Investments unit of Fidelity Investments, serving 4 million customers with $500 billion in assets.

She answers our questions in this e-mail Q&A.

Poping Lin: We are familiar with the benefits of outsourcing various corporate functions, but the idea of outsourcing marketing, at least beyond advertising, seems relatively new. Can you discuss this concept and the potential benefits to businesses?

Gail J. McGovern: The outsourcing of marketing activities is catching on; in fact, in a recent poll of marketing executives, 53 percent reported plans to outsource most of their marketing activities.

The benefits to business include cost savings and improved quality. Additionally, many firms lack “left-brain” analytical skills in-house, even though those skills are becoming more important than ever in an age of one-to-one marketing, and find that outside expertise is often needed. Sony, a legendary marketer, outsourced its program to market products through its online “Sony Style” store, recognizing that they needed expertise in areas such as customer database construction.

With media fragmentation, such decisions will become far more common, because companies can no longer rely on mass marketing to reach prospective customers. Communication tasks have become much more complicated, and therefore more dependent on computer-aided analysis.

Q: What marketing functions should and should not be outsourced?

A: Companies stand to benefit considerably by outsourcing, for example, analytical functions to qualified suppliers if those skills are lacking in-house. But some aspects of marketing are less amenable to outsourcing—those that directly drive marketing strategy.

While computers are important, the CEO and top managers still need to meet regularly with customers. Companies need chief marketing officers to drive marketing strategy and make the most of the company’s customer relationships. And companies still need flesh-and-blood employees to win and service major accounts.

Q: What is the role of the head marketing executive who oversees an outsourcing program in his or her department?

A: The skills required of the marketing manager are rapidly changing. Today, managers are like ringmasters in a circus; they must understand how to access the skills they need, since in practice they are relying on a variety of in-house and outside suppliers to get the job done.

Q: What are the keys to consider in successfully managing outsourcing relationships?

A: Marketing managers need to nurture ongoing relationships with outside suppliers. The best outsourcing arrangements are partnerships. Suppliers should not be regarded as mere contractors, since contractors do not always perceive a long-term stake in the project’s success.

The value created should be seen as shared value. Managing suppliers in this way requires a great deal of skill and competencies that are not always resident within a firm. This challenge requires negotiation and communications skills as well as a strong ability to project manage several elements of various marketing campaigns.

Q: Is there a tie between outsourcing marketing and the increased global outsourcing we see in other functions? Will offshore marketing be next?

A: There are some strong connections. Motivation, for one. Companies in general turn to outsourcing as a means of saving money while accessing the skills they need, whether it’s marketing or IT services.

As companies have become more comfortable and familiar with outsourcing arrangements, they’ve become willing to trust outside suppliers with business functions that, until recently, have not been outsourced.

Q: What are you working on now?

A: I am exploring board governance issues, specifically the role that boards should play in ensuring the effectiveness and efficiency of the marketing function in a firm.

About the author

Poping Lin is a business information librarian at Baker Library, Harvard Business School, with a specialty in marketing.

Copyright © 2011 President and Fellows of Harvard College


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Jewish Event Planning 101 – Why You Should Outsource Your Event Planning

Jewish Event Planning 101 – Why You Should Outsource Your Event Planning

Here’s an overview of the benefits of outsourcing your event planning to the experts. We know that outsourcing sounds evil and un-American, but that’s not what outsourcing entirely means.

Outsourcing is very misunderstood.

Some interpret outsourcing as costing American’s jobs by sending them overseas. Others consider outsourcing as a cheap way to get things done. In reality, outsourcing is simply defined as creating efficiencies in the workplace by letting outside specialists handle tasks within their field of expertise. Outsourcing itself is nothing new. Firms have long hired outside vendors to handle marketing, advertising, public relations, media buying, event planning, web design, printing, and many other services that are deemed by companies as “necessary functions best left to experts”.

Outsourcing creates an efficient team of expert planners.

That’s what outsourcing your event planning does: creates an efficient team of expert event planners or your events, removing workplace inefficiencies such as time, expense, and uncertainty of creating, planning, maintaining relationships, and coordinating events.

Benefits of Outsourcing Your Event Planning


  • Experts in Event Planning…

Every firm aims to hire the best employees with the most expertise. Unfortunately, when it comes to event planning, that doesn’t always happen. Most firms rely on interns, temps, inexperienced employees in different departments, or part-time receptionists to plan their events. That method of operating is similar to sending a novice to close an important sales deal. From a time management point of view, researching and qualifying catering, venues, entertainment, and other event services are time-consuming and ancillary tasks that cut into a person’s everyday workload. As a result, the  “non event planning” employee may settle for a simple solution and a simple event just to get the task out of the way. That leaves your firm with a mediocre event with potentially low attendance, unqualified attendee’s, and ineffective results

  • … Create Memorable & Successful Events.

Effective and efficient firms send their best to close the deal, and for your events, with dozens or hundreds of prospective clients and deals possible, why use a under qualified team to create a mediocre event? Organizations need to have memorable, outstanding, and inspiring events for their current and prospective donors to attend and those donors need to see that the organization has efficient leadership and that their dollars are being  put to good use. Mediocre events don’t create valuable memories of the product or service; bland fundraising events don’t inspire confidence in the organization. By outsourcing to expert event planners, your firm has access to an expanded talent pool with innovative ideas and fresh perspectives all at greater cost savings. Event planning experts make sure the events they plan are outstanding, memorable, and inspiring. And if you’re looking to make an impact and leave attendee’s wanting more, your firm should defer to the experts.

  • Saves costs (making your dollars go further).

Saving money while trying to make your dollars go further is a task on every firm’s mind. In tough economies, firms need to do more with less. Budgets for marketing, event planning, and public relations can be very tight, especially during a slow economic recovery. Yet smart companies and organizations understand that when times are tough, marketing, PR and event planning are more important than ever and extremely vital to their growth and mission. By outsourcing those tasks, your firm is able to work within your budgetary framework, reduces overhead and operating costs (such as office space and employee benefits), and increases worker efficiency by allowing them to focus on more important and concentrated tasks.

  • Greater employee efficiency. Less “filler work”.

When not planning events, employers have a tendency to fill event planners daily workload with “filler work”. Faxing, copying, answering phones, monitoring your social media, etc … Honestly, these are tasks that can be done by an hourly intern instead of a salaried employee with benefits. Not only is “filler work” tedious, belaboring, and uninspiring for event planners, your company risks creating negative workplace morale and diluted employee job satisfaction. Which means that before long, you’re event planners could bail for more growth-oriented positions. If an event planner was hired to plan events, then that employee wants to do just that and play to his strengths and core competencies. If your firm isn’t having enough events to justify a full time event planner or filling an event planners time with “filler work”, its time to consider outsourcing your event planning tasks.

  • Negotiate better pricing through strong relationships.

A major detail in the event planning process is obtaining the best selection of services at the best price. Within organizations and businesses, management that constantly shops for a “best-price” deal in their event planning is usually unable to capitalize on the capabilities or selection that knowledgeable event planners can offer. As time goes on, firms sense of urgency in their event planning could mean closing on the first available vendor, not utilizing the advantages of negotiating pricing and services. Experienced event planners have extensive vendor databases, established relationships, and a distinct advantage in obtaining the best service at the best price.

Work with experts. Save money.

Increase efficiency. Obtain better pricing.

Outsourcing is starting to make a lot of sense.

Henry Isaacs

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The brains behind this blog.

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