January 2009

    
   
   

WHERE COMMUNICATIONS INFLUENCE DECISIONS
   

The Point:
 

Cutting Staff, Keeping Customers:

    
 

Smart Outsourcing Decisions Can Help You Do More With Less

As the economic downturn continues, almost every company is dealing with the need to cut staff. At the same time, the pressure to produce results has never been more intense. Marketers, struggling to do more with fewer people, are deciding what functions or services should be managed in-house and which should be outsourced to a marketing services partner.

There is no single best practice. Some companies find that the internal organization is best equipped to manage ongoing core requirements, bringing in outside agencies to deal with unexpected deadlines, handle a stand-alone assignment, develop a new concept, or just bring in fresh ideas. Others find that outside agencies can be used cost-effectively for more routine work, giving the in-house staff the latitude to tackle more strategic and juicy challenges.

Whether deciding how to handle a single project or an entire function, here are four questions every marketer should ask:

1.

How can we best maintain the quality and expertise we need?
As the number and complexity of communication channels grow, it takes more specific expertise to make sure you are making optimal use of the right channels. Where is the necessary channel expertise—in-house or at an outside agency? Who is keeping up with new developments? Can you rely on unbiased channel selection? Can you attract and retain this kind of expertise internally? Do you have the control and reward systems that motivate creative talent?

2.

Does the scope of our work line up with our capacity?
If your volume of work can keep your whole creative staff fully productive throughout the year, it could make sense to manage marketing services internally. However, if demand is unpredictable or episodic, or you need different skills at different times, a full-scale, full-time creative staff may not make sense, especially when you take into consideration the fully-loaded costs of salaries, benefits, supervision, management, accounting, recruiting, training, rent, and equipment. Labor-based fee arrangements with external partners may help control costs while giving you the flexibility to bring in specific expertise only when you need it.

3.

How can we be the most responsive?
As in-house staffs get smaller, they can find it harder to respond to last minute or unexpected needs. So many in-house creative services departments find it makes sense to use outside creative marketing firms for rapid turnaround or to fulfill needs that cannot be met internally. Alternatively, outsourcing routine and predictable work to a reliable third party can free up a smaller internal staff to focus on strategic projects or one-off jobs that need fast turnaround.

4.

How esoteric is our business?
What is the importance of specialized knowledge—either industry-specific or company-specific? How quickly can it be learned? Where esoteric expertise is required, an in-house staff may be a smart way to go. Many companies find an outside agency with specialized practice areas fits their needs and allows them to manage the ups and downs of demand, or to expand into new channels or audiences as things change.

Many companies choose to manage creative services in-house because they are concerned about ownership of intellectual property rights. But these remain vested with the client whether the work is done internally or externally, so that doesn’t need to factor into your decision.

The most important decision is choosing how to continue marketing effectively to your customers while managing the realities of today’s business constraints.