Outsourcing Set to Win New Fans in 2012?

The last six months have witnessed a strong surge of interest in outsourcing from companies who’ve previously rejected the approach. Undoubtedly the current economic climate and financial pressures have prompted this trend, but the arguments for outsourcing billing, transactional and critical mail to a specialist third party become even stronger when one combines traditional outsourcing benefits with the opportunity to upgrade to truly integrated communications.

As the UK struggles to climb out of recession every company must urgently consider how it can improve its bottom line. Innovation, creative products and services and new marketing techniques are often the focus, but at the same time organisations must identify any quick win activities that offer business improvements as well as cost savings.

Step forward outsourcing, one of the most obvious avenues; it’s a well-tried concept, has been around for many decades and is a trusted approach yet it’s still overlooked by many that might benefit. The concept that a company can do, and be, everything is widely accepted as flawed, and outsourcing certain non-core elements of business operations makes good business sense. You may already be outsourcing elements of your business operations successfully; if you employ lawyers, accountants, caterers, cleaners or designers for instance.

If you are running your transactional customer communications using in-house facilities and staff, accepted business advice would be to consider the argument for outsourcing. The immediate and obvious benefit is cost savings in terms of reducing headcount, resources and estate. In the longer term you can also dispense with the cost and complexity of upgrading your facility, purchasing new agreements or software licenses as well as recruiting and training personnel. However, there are other compelling arguments to consider.

By moving to the right communications provider it is possible to benefit the business in several ways. If you move the responsibility for billing, transactional and critical mail to the correct third party you can justifiably expect to reap the benefits of being at the forefront of technology, market trends and you should also be getting the best, independent advice as part of the deal, whether it concerns data analysis or document composition.

Contrast that with the 7-10 year investment cycle that most organisations work with and its clear that these organsiations will inevitably behind the curve in any number of ways. Few organisations can afford state-of-the-art equipment for colour digital printing for instance and may be making do with what they can do, rather than what the business really needs. For instance, take a crucial marketing campaign, where a high level of personalisation is possible so targeted messages can be delivered effectively.

In addition, once working with a third party you may be able to access postal optimization or expert VAT advice as well as other benefits which can bring down the cost of communications considerably.

One of the barriers that often prevents companies outsourcing is the perceived loss of control or risk that may be involved. However, with good research in selecting a partner, you should actually be able to achieved more control and be subject to less risk.

Partners are bound by tight contracts, service level agreements and penalty clauses for missed deadlines. Added to that, you have no people management issues to consider. The future’s hard to predict of course, but you may need to call on the scalability that a larger partner can offer.

If you’ve bought into this so far, the only question left is how do you pick a partner?  As with any business arrangement, look for reliability, stability, and the necessary resources that you can envisage needing in both the short and long term. The partner should show themselves to be forward-thinking, committed, willing to invest in the relationship and of course the chemistry must be right. Any sensible check list should also include compliance with ISO27001, the information security standard, and BSI 25999, the gold standard for business continuity management. After all, you need to know that your chosen partner will still be in business itself when you need them.

A smooth transition is absolutely necessary and any partner should be able to show a solid track record in structuring a phased transition with strong testing, mirroring and penetration testing to ensure premier security of data.

Once these requirements are satisfied, you should be able to progress with confidence, and start reaping the multiple benefits that outsourcing can offer, within a shorter period of time than many other business improvement measures might take.

By John Carter, managing director, Stralfors UK

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