Outsourcing is a widely accepted practice that is impacting virtually every business and business function. The Harvard Business Review has identified outsourcing as one of the most important management ideas and practices of the past 75 years.
The reason for the rapid ascent of business process outsourcing (BPO) is simple. BPO allows companies to focus on core competencies and increase efficiency without having to invest in people and technology. It also helps companies become more profitable and leads to better service levels than internal departments can provide.
The shift to outsourcing the mail management and reprographics (print) functions is just as pronounced and for the same reasons. Outsourcing helps improve the processing of all forms of customer communications by speeding response and cycle times, lowering costs, bolstering security and confidentiality and minimizing the risk associated with the flow of mail, documents and packages into, within and out of businesses and government agencies.
The hard-dollar savings that BPO yields via improved efficiency and effectiveness can be compelling. For example, a US-based auto manufacturer achieved a 27% reduction in costs (approximately $11 million annually) by consolidating its mail distribution system. A major financial institution achieved improvements in mail operations and lower postage costs totaling more than $20 million. One state government that consolidated mail from several agencies into a single processing hub achieved more than $5 million in-cost savings over five years through postage savings, improvements in mail services operations and cost avoidance.
There are several key aspects to successful outsourcing. The first is the ability of the outsourcing partner to fully understand the customer's internal business processes and to possess the necessary resources, capabilities and expertise to perform the outsourcing activity. There is also a trend toward the convergence of mail and reprographics in large organizations, which offers important opportunities for cost savings and improved efficiency for managers who understand the synergy the two previously isolated functions offer. A third aspect involves the understanding that mail and customer communications are absolutely vital to continued success and are becoming increasingly linked to the effectiveness of internal business processes. When closely linked to the core of the business, mail can help achieve the most fundamental business objectives of acquiring and retaining customers, gaining market share and improving cash flow.
Future cost avoidance is another objective. A successful outsourcer will evaluate and deploy the latest and most effective state-of-the-art technology. This constant focus on technology will enable the service provider to deepen and leverage its knowledge of technology and integrate advances, when appropriate, to help control costs and boost productivity. There is also an urgent need to ensure the confidentiality of customer records and comply promptly and fully with numerous regulatory and legal requirements. Outsourcers who specialize on behalf of others in meeting the mandates of Sarbanes-Oxley and HIPAA, for example, automatically bring that deep expertise to new engagements.
The realization that business is a continuous 24/7/365 operation is yet another factor in favor of outsourcing. If you are considering outsourcing your mail and print management operations for the first time, or want to change your present outsourcing partner, here are some considerations:
Breadth of Experience Your partner's experience should be broad and deep and encompass both print and mail finishing. Ideally, the experience will span all major industries and include specialization in your market segment or specific industry. This background will ensure that your partner fully understands the nuances of your applications, can achieve a level of performance that is among the best in your industry and will be able to implement innovations and best practices from other industries.
A Superb Reputation Your partner should have a superb reputation for meeting SLAs and customer references from a wide mix of Fortune 1000 businesses. They should also have a vision of the future, top-quality management and a consistent record of strategic investments.
Gain Sharing Your partner should be secure enough in its process redesign capabilities and ability to find efficiencies in your business that it is willing to share cost savings with you in lieu of a flat fee.
Equipment Agnostic The best mail processing and print solutions are versatile. They minimize future expenses and maximize future productivity by allowing the capability to easily add or upgrade components as necessary. This is best achieved when your partner is equipment agnostic and selects solutions regardless of vendor that are customized to deliver greater enterprise productivity at a lower overall cost.
Strong R&D Expenditures Your partner should have a substantial ongoing investment in R&D bolstered by a long and steady record of innovations and enhancements that clearly result in improved performance. If the R&D record is stagnant, or marked by irregular advances, you may be locked into a "standing still" position.
Continuous Improvement Technological leadership hinges on more than just acquiring the newest equipment. Your partner should be skilled in workflow analysis and utilizing advanced techniques, such as Six Sigma processes, to improve efficiency and effectiveness.
Flexible Capacity Your partner should have a mix of on-site, off-site and near-site facilities capable of handling your space and financial requirements as well as extra workload, when necessary.
A Total End-to-End Solution Make sure your partner has expertise in managing your organization's entire flow of mail and documents, such as production, postage and carrier, tracking and records management.
Customized Solutions Your partner should have the capability to provide solutions that are customized to fit your individual business needs.
As competition in the marketplace increases and business budgets decrease, more and more companies are realizing the benefits that outsourcing their mail management and reprographics functions can provide, enterprise-wide.
Vincent De Palma is Executive Vice President and President, Pitney Bowes Management Services. Please visit www.pb.com.
