At some point in their careers, most print or mail operations managers will be faced with the decision to outsource some or all of the work they are doing. The trends toward outsourcing come and go. But with so many companies looking for ways to lower their document costs these days, outsourcing is cycling around to be a hot topic again.
Decision Factors for Outsourcing
There are many factors to consider and questions to ask when contemplating an outsourcing decision. Here are a few items to think about:
--Can an outsource vendor provide capabilities and features that would be impossible for you to match without large capital investments?
--Have document volumes fallen to the point that your staff and equipment are under-utilized?
--Do smaller mail volumes make it difficult to justify the expense of upgrading or replacing hardware or software?
--Has mail preparation gotten so complicated that you think it is better left up to professionals who make that their only job?
--Have your presort qualification levels changed, requiring you to pay postage at the 3-digit rate in areas where you used to qualify at 5 digits?
The per-unit cost of a piece of mail is just one isolated component that should be considered in the organizational decision-making process.
Outsourcing should be viewed as a management tool, not just a way to transfer responsibility or cut costs. A good outsourcing vendor candidate will provide a quote to replicate what a prospective client is currently doing, and present specific and measurable suggestions for improvements or enhancements to that process.
Outstanding candidates will also probe to see if there are requirements that are not being met and provide you with ideas about how to get to the next level while still maintaining reasonable production costs.
Managing an Outsource Provider
Turning over production work to a vendor doesnâ¬t absolve a company from oversight responsibilities; there is a new dynamic at work when a third party takes over document printing, mailing, and/or sorting tasks. Whereas an internal operation is always concerned with cost, it is not necessarily looking to make a profit. But an outsourcing vendor has a different perspective. Promises made by the vendors sales and marketing team must be upheld by its production team. This often requires some concentrated interaction and communication with the vendorâ¬s implementation team prior to transferring the jobs.
The ability of the outsourcer to do the same work for less money is vital. However, once the contract is signed and prices are established, every penny that the vendor can save in production costs falls right to their bottom line. Vigilant oversight is necessary to make sure that any cost-reduction measures taken by your vendor do not compromise the quality of the work. It is important, therefore, to insist upon reporting and adequate monitoring ability.
Set up regular meetings with the outsource vendor and to do quality-checks on a regular basis. In addition, visit their production sites periodically. Effective and consistent communication is essential for any outsourcing arrangement to be successful.
Using Outsourcing to Your Advantage
Outsourcing print and mail is often accompanied by workflow redesign and business process re-engineering. It is inevitable that with exposure to a different viewpoint and new technologies, new ideas will emerge. This can be good opportunity to take advantage of the efforts.
Operations managers are key resources as an organization brings a new outsourcing partner into the workflow. The relationship between your company and your outsourcing vendor is an interdependent one; both companies must be in alignment with their business goals and strategic decisions. On an operational level, peers at both companies must be able to communicate effectively to answer questions and fix problems as they come up.
Mike Porter is an expert in Print and Mail operations and President of Print/Mail Consultants, an independent consulting firm that helps companies nationwide be more productive, adapt to changing requirements, and lower costs in their document operations. For more suggestions about reaching out to your customers visit www.printmailconsultants.com or email Mike directly at mporter@printmailconsultants.com.
Decision Factors for Outsourcing
There are many factors to consider and questions to ask when contemplating an outsourcing decision. Here are a few items to think about:
--Can an outsource vendor provide capabilities and features that would be impossible for you to match without large capital investments?
--Have document volumes fallen to the point that your staff and equipment are under-utilized?
--Do smaller mail volumes make it difficult to justify the expense of upgrading or replacing hardware or software?
--Has mail preparation gotten so complicated that you think it is better left up to professionals who make that their only job?
--Have your presort qualification levels changed, requiring you to pay postage at the 3-digit rate in areas where you used to qualify at 5 digits?
The per-unit cost of a piece of mail is just one isolated component that should be considered in the organizational decision-making process.
Outsourcing should be viewed as a management tool, not just a way to transfer responsibility or cut costs. A good outsourcing vendor candidate will provide a quote to replicate what a prospective client is currently doing, and present specific and measurable suggestions for improvements or enhancements to that process.
Outstanding candidates will also probe to see if there are requirements that are not being met and provide you with ideas about how to get to the next level while still maintaining reasonable production costs.
Managing an Outsource Provider
Turning over production work to a vendor doesnâ¬t absolve a company from oversight responsibilities; there is a new dynamic at work when a third party takes over document printing, mailing, and/or sorting tasks. Whereas an internal operation is always concerned with cost, it is not necessarily looking to make a profit. But an outsourcing vendor has a different perspective. Promises made by the vendors sales and marketing team must be upheld by its production team. This often requires some concentrated interaction and communication with the vendorâ¬s implementation team prior to transferring the jobs.
The ability of the outsourcer to do the same work for less money is vital. However, once the contract is signed and prices are established, every penny that the vendor can save in production costs falls right to their bottom line. Vigilant oversight is necessary to make sure that any cost-reduction measures taken by your vendor do not compromise the quality of the work. It is important, therefore, to insist upon reporting and adequate monitoring ability.
Set up regular meetings with the outsource vendor and to do quality-checks on a regular basis. In addition, visit their production sites periodically. Effective and consistent communication is essential for any outsourcing arrangement to be successful.
Using Outsourcing to Your Advantage
Outsourcing print and mail is often accompanied by workflow redesign and business process re-engineering. It is inevitable that with exposure to a different viewpoint and new technologies, new ideas will emerge. This can be good opportunity to take advantage of the efforts.
Operations managers are key resources as an organization brings a new outsourcing partner into the workflow. The relationship between your company and your outsourcing vendor is an interdependent one; both companies must be in alignment with their business goals and strategic decisions. On an operational level, peers at both companies must be able to communicate effectively to answer questions and fix problems as they come up.
Mike Porter is an expert in Print and Mail operations and President of Print/Mail Consultants, an independent consulting firm that helps companies nationwide be more productive, adapt to changing requirements, and lower costs in their document operations. For more suggestions about reaching out to your customers visit www.printmailconsultants.com or email Mike directly at mporter@printmailconsultants.com.
