Mar 8, 2011

4 Things Digital Marketers Can Learn from IT Outsourcing

There’s no doubt that globalization has been one of the most profound forces in business and economics in the last century, and that IT and customer service outsourcing was one of the first large manifestations of this megatrend. Businesses realized they could dramatically and very quickly reduce costs , while consumers got to know a variety of global accents when calling IT help desks or tech support.

For early adopters, things didn’t always work out as planned. Customer satisfaction suffered, process performance lagged and, in plenty of cases, the projected savings never materialized.  Just Google “IT Outsourcing Disasters” and enjoy some of the horror stories among the 5.7 million results. The point is, some companies learned just how expensive cutting costs can be. And quite a few ended up moving call centers, data centers and application development teams rapidly back on shore (with still more cost and disruption).

Today, outsourcing and offshoring have matured to become part of the standard toolkit for top performers in a wide range of industries. These would be the firms that learned their lessons and figured out how to take advantage of outsourcing’s inherent advantages (such as dedicated domain expertise, follow-the-sun development, and lower labor costs) and use them in the context of their own unique business models.

It’s no wonder that marketers are increasingly attracted to these same benefits. Digital marketing is particularly well suited to outsourcing because of the need for process automation, discrete technological skills, management and tracking of high-volume outputs, and to ensure results and quality levels.  Think about it: digital marketers need high degrees of process automation, access to discrete technological skills, the ability to manage and track high-volume outputs, and optimize performance based on results. Done right, digital execution significantly boosts marketing ROI, but the past mistakes must be avoided.

To that end, we recommend the following outsourcing lessons learned (sometimes painfully) by IT:

  1. Think quality & value:  Initially, the business case for IT outsourcing almost exclusively about cost takeout. The old joke was “your mess for less” – that is, companies just handed off broken or highly manual processes to low-cost service providers, with little or no thought to quality or efficiency. Well known brands can’t afford such compromises, and certainly can’t risk sloppy execution. Therefore, CMOs and senior marketing executives must think in terms of a broader value proposition that takes into account quality, speed of execution and other performance metrics. Setting service level agreements – a standard in IT outsourcing – ensures that companies also get the quality they need, not just the raw cost savings. In our experience, this broader view secures the savings, too.
  2. Embrace strategic sourcing & centers of excellence: Today, many CIOs use a range of service providers to handle the tasks and workloads in which they have the most expertise, with some activity retained in house. In digital marketing, that equates to having senior creative staff (usually at an agency) develop the core creative concepts, and then turning to dedicated experts in Flash development, email newsletter distribution, online advertising campaign management and other areas to actually execute the campaigns. For instance, Deliver has a number of dedicated centers of excellence for specific production disciplines within our network of global production hubs. The big idea is for marketers is to gain access to the right resources when at the right time, ideally in a nimble “on-demand” model.
  3. Find the right shore: Once it seemed like every IT job in the world would move to India, but many top IT groups leverage a “right-shoring” strategy that ensures they have the security, flexibility and cost structure they need. Often, this is a matter of staying close to the business and ensuring that high-value and core competencies (infrastructure design and interfacing with the business, e.g.) are handled by highly skilled resources, while lower-value and administrative (say, basic systems administration) work is handled in lower-cost locations. Cultural and language factors may also be involved in determining where to locate work, as is the need to shorten timelines through “follow-the-sun” collaboration. Digital marketers increasingly must assess these variables in designing the optimal ROI models for their enterprise activities and individual campaigns. In other words, they must ask themselves both “who should do the work?” and “where should the work be done?” At Deliver, we have senior staff located in New York, London and other large markets who interact directly with marketing executives, manage strategic relationships, and ensure smooth transitions. Meanwhile, our hubs are located globally, giving us the flexibility to choose optimal location strategies of different marketing programs and needs.
  4. Choose partners: As technology has become essential to how we live and work, IT has grown more important as a strategic enabler of business success. Thus, forward-looking IT leaders think in terms of having IT partners, not merely vendors. Marketing has always been an absolutely critical for top companies, and therefore partnership with different groups that execute campaigns and brand programs has been a longstanding practice. Partners add value when they can share proven processes, advanced technology and devise strategies that help their clients succeed. In IT, that could be next-generation network monitoring tools and accelerators for packaged software implementations. In digital marketing, it can be a leading-edge production platform for workflow, asset management and reporting. In our work with leading global marketers, we’ve seen again and again the value of this partnership approach. We advise on the best production strategies for different types of campaigns and then help our clients access the tools they need to execute them.

With more pressure on marketers to deliver results and more dollars being dedicated to digital channels, these outsourcing lessons have never looked more attractive. It is even better news that digital marketers won’t need a generation to learn them, thanks to our colleagues in IT.

This entry was posted on Tuesday, March 8th, 2011 at 4:11 pm and is filed under Best Practices, Industry Insights. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

2 Responses to 4 Things Digital Marketers Can Learn from IT Outsourcing

  1. Lino Annabel says:
    March 16, 2011 at 1:46 pm

    I’ve got to make the comment that it is really quite refreshing to see a relatively original blog like this, excellent job. I look forward to visiting quite often.

  2. September 18, 2012 at 4:57 am

    Will keep this in mind, thanks!

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