With the growing popularity of on-demand software, also called software-as-a-service (SaaS), the old debate of in-sourcing vs. outsourcing rages on in many technology segments. E-mail marketers have faced this issue right from the start; however, the debate takes a somewhat different slant.
The usual in-sourcing vs. outsourcing debate revolves around whether you want to deploy the technology inhouse or have an outside service provider deploy and run the technology on your behalf in a hosted environment. With e-mail, the debate almost never is a question of your buying the hardware and software and running your own e-mail marketing program and sending all the mail from internal infrastructure. Rather, it is a question of the degree to which you outsource. Minimally, all your e-mail traffic will go through an e-mail service provider (ESP). The only question is how much of the effort you will handle inhouse using the ESP’s self-service tools (in-source) or how much you will rely on your vendor’s expertise and discipline to execute your programs (outsource).
Ironically economics, a key part of the in-source/outsource decision in other technology segments, isn’t so much a factor in the e-mail service decision. All things being equal, your cost will be about the same whether you have a staff who uses the provider’s self-service tools or you turn it over to the provider’s team for execution.
Rather, the decision revolves around four things:
· Your need for control.
· Your need for speed (fast turnaround).
· Your desire for a disciplined process and the quality control it provides.
· Your need for sophisticated, advanced features and the expertise to execute them.
Let’s start with the need for control. This usually comes from your data people who justifiably worry about the security of data held by a vendor and the potential disconnect between external and internal data. You can overcome these fears, however, by choosing an ESP that has built a robust infrastructure that makes synchronization of databases an automated and simple process and that can verify it has put all the necessary security controls in place. This comes down to a question of meeting ISO security certification standards (particularly ISO27001).
Speed is another issue that can go either way. Managers who like in-sourcing because they feel their people can crank out a mailing at the last minute may be fooling themselves. What they may really be saying is that their planning process is lacking, which forces them to do things in last-minute fire drill mode. If that’s how you operate, then in-sourcing indeed may be an advantage. The outsourcing provider can move fast too, but any “rush job” has its risks and needs rigorous processes to avoid trouble.
If you find yourself in rush situations often, you ought to revisit your planning process. On the other hand, if the nature of your business requires instant communications, such as breaking news alerts or price changes, it’s likely that you’ll need a highly customized solution to match those needs and your specific requirements – something better built and integrated into your systems by outsourcers than “one size fits all” tools.
This leads into process discipline and quality control, which are similar to the speed issue. The full-service provider will likely enforce more process discipline–it has to because of the hundreds of mailings it prepares every day for many clients–which in turn results in smoother processes and better-quality output. You can get discipline and quality control with the in-sourcing option, but you will have to enforce it on your own. While self-service tools can be quite robust, no tools enforce the business process and manage last-minute chaos in the same way a skilled account manger does.
Advanced features address the depth of capabilities the ESP offers. If you rarely if ever need anything more than the basic capabilities available through the provider’s self-service interface, though, then the in-source option will be fine. But if you’re looking to employ more-sophisticated targeting tactics, such as testing or behavior-based programs, you could benefit from a provider’s years of experience learning what to do and what not to do.
In the end, the in-source or outsource decision may come down to a matter of degree. It’s likely that some percentage of your mailings can be perfectly well executed inhouse. It is also likely that your most advanced mailings – those that integrate deeply into your other systems and deliver the highest level of relevance to your customer and keep you on the leading edge – are better served by an outsourcer who has to be up on the latest technologies and techniques and can configure its platform to your specific needs.
So the real question may well be, Can you find a single vendor that allows you to do both: in-source what makes sense and outsource the rest? This is a popular trend among ESPs today – you just have to ask.
John Rizzi is president/CEO of e-Dialog, an e-mail services provider based in Lexington, MA.
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