Direct Marketing Article
Outsourcing without Compromising Total
Involvement and Control
By William Gindlesperger, CEO, e-LYNXX Corporation
Outsourcing as a business strategy began gaining prominence in the late
1980's and early 1990's 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.
When buyer organizations began outsourcing some of their core competencies
then 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. Regardless, whether it is called outsourcing
or a strategic partnership, the buyer organization is using outside
resources to perform activities traditionally handled by internal staff with
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% to 20% for the last decade – in good economic
times and bad.
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 procurement technology, a buyer today can gain the
advantages of outsourcing without experiencing the negatives. This is
possible because of research and development that was conducted in the
1990's that culminated with patents being awarded in 2002, 2008 and 2010.
The patents provide the foundation for a competitive procurement environment
in which vendors bid to win work by offering deep discount pricing of 25% to
50% 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. Vendors normally price work based on how much the buyer is
willing to pay. If vendors price too high, buyers shy away from dealing with
them. If vendors price too low, then buyers want to hold vendors to the
prior price. 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. Vendors can now base their pricing
less on what they perceive the buyer is willing to pay and more on the
instant need to fill their production gaps or downtime.
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 for buying its
mailings, the designer would put into the system theme ideas, layout
suggestions, photos, etc. Because this system is web based, only buyer and
vendor designees have access. Input is instantaneous in the system's
self-contained, secure, intuitive 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. As work progresses, access among team members
will change. Some may not need to communicate about production, packaging,
delivery or invoicing. Others will. Some, like the buyer's chief marketing
officer and the vendor's account manager, will need access from start to
Every task is benchmarked and whoever is responsible for that task must
verify changes, its completion and make notations as needed. Because of that
sophisticated level of information sharing, accountability is fully assigned
and documented. Because all actions are available for everyone who is given
access to see, the total process is 100% transparent. Because every action
and notation is documented and archived, the system becomes a powerful
resource for planning future projects.
Outsourcing may be a misnomer for this type of interactive teamwork between
the buyer and the vendor. This is more than contracting with an outside
vendor and hoping for top quality results. This is more than a way to reduce
costs significantly. New procurement technology offers an alternative -- one
that proves innovation can have positive bottom line results without the
negatives that are commonly associated with outsourcing.
About the Author:
William Gindlesperger, CEO of e-LYNXX Corporation, is a nationally
recognized for his work that has benefitted buyers of customized goods and
services with measured and substantial cost reduction.
Full bio at
e-LYNXX Corporation (www.e-LYNXX.com
- 888-876-5432) works with printers to win U. S. Government Printing Office
(GPO) work and with print buyers to streamline procurement and reduce costs.