Don’t Try This at Work

Do you know what you do for a living? If you dig past the magma of this year’s strategy, when do you reach the core of your competencies?

You’re probably forced to spend a lot of time doing things in-house that offer no competitive advantage. That’s where strategic outsourcing comes in. To find out if you’re ripe to outsource some of your tasks, take this quick test. Are any of the following on your top objectives list for the new century? 1. Increase inefficiency. 2. Duplicate redundant efforts. 3. Reduce value while adding costs. 4. Duplicate redundant efforts.

I asked some experts what they think about getting your work done for you. They call on you, they offer you services, but they rarely get a chance to be brutally honest about why they do what they do, and why you should hire them to do what they do. You packaged goods professionals are welcome to read on, but only if you openly acknowledge that you cannot use any of these words against them.

“The world today is all about fast, efficient change,” says Jon Kramer, president of Stamford, CT-based marketing communications agency J. Brown/LMC Group. “Outside resources – which have dealt with and managed evolution across a wide variety of companies and cultures – are incredibly valuable. Most manufacturers don’t understand the amount of time it takes to accomplish a task. They want to continue to do things in the same way, but are not happy with the results that they get.”

“Outsourcing allows for immediate implementation and benefit, rather than having to build and test,” says Conrad Honeycutt, senior vp-new business alliances for Eden Prairie, MN-based Gelco Information Network.

“You can’t do it all yourself anymore. The key becomes establishing the right partnerships and utilizing your partners to help you get where you need to go,” says Gary Yost, vp-marketing for Livonia, MI-based Valassis Communications. “The one thing that makes me crazy is the increased reliance on Purchasing for important outsourcing decisions. In most cases, these initiatives are price, price, and more price. The very mechanics of squeezing suppliers for price while disregarding the other tangible and intangible aspects of the relationship sorely compromises the ability of suppliers to drive results for their clients.”

“Outsourcing companies can bring best practices from different industries and trade sectors,” says Steven Stocks, president of Irvine, CA-based Sales & Marketing Group. “People forget the overwhelming power of simplicity.”

“It constantly amazes me how everyone in this business feels they need to re-invent the wheel,” says Jeff Folloder, customer deployment manager for Dallas, TX-based ViaLink Co. “If you make widgets, make great widgets; you’ll never be a great success at creating and operating your own systems. So, you might as well let someone who does make great systems do it for you.”

“It’s a tough time to work at a CPG manufacturer. It’s tough for them to learn new technologies,” says Ian Melanson, vp-marketing for Bellevue, WA-based Coinstar. “[CPGs] could really help themselves by partnering with people who live and breathe this stuff. I think that manufacturers are often frustrated when they try to outsource because the results can be spotty. In many cases, [it’s because] they haven’t shared specific objectives and strategies, leaving their partners to guess. The best work will always come when there is clarity about shared objectives.”

“CPG manufacturers should look to an industry-focused provider to deliver systems that meet their needs,” says Harris Fogel, vp-business development for Atlanta, GA-based CAS-Americas. “Then the manufacturer will receive supportable and maintainable functionality without having to rely on a large in-house development staff.”

“When the average packaged goods manufacturer sends its own person to a store for a half-hour visit, it costs almost four times more than hiring a third party,” says Tim Hawkes, principal of Westport, CT-based Trade Zone. “Perhaps this is why most major sales forces have been consolidated and downsized in the past 10 years, and why the third-party merchandising business has grown geometrically during the same period.”

“Sometimes, you need to watch how far you go,” says Brian Heffler, vp-sales for New York City-based Experian. “If you break up a job into every component and have different suppliers for each, you’ll do more work just managing the process.”

When it comes down to it, you need to remember not just what you do, but what you don’t do. What are the things that give you an edge, and what are the specialized things you can delegate to others?

“I don’t wake up every morning wondering `Gee, how can I be the same as everybody else?'” says Danny Wegman, president of the innovative Rochester, NY-based supermarket chain that bears his name. “I want to concentrate on what makes me different.”