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For busy wide-format imaging professionals, outsourcing work to a trusted partner can make a great deal of sense. Outsourcing allows a shop to take on more work than its equipment, manpower and capacity would normally allow it to handle. This can be especially important for companies dealing with seasonal or holiday overloads. Sending work out can also free up a business to focus on the work it does best, while gaining the benefits of the expertise provided by the outsourcing partner.
Outsourcing isn't the answer in every situation. Shops can have legitimate concerns about loss of control, and the quality and expediency of the company to which it outsources. There also comes a time when the volume of work justifies the additional equipment or manpower expense.
According to Alex Sumarta, an analyst for document outsourcing consulting services at Weymouth, MA-based InfoTrends, document outsourcing is a delegation of document-related services to a service provider under a long-term contract, typically three to five years.
"We continue to see an increase of outsourcing revenues," he says. "However, more enterprises today are interested in getting more control over their documents. What does that mean? At a glance, this would mean less document work getting outsourced. However, despite wanting more control, many enterprises find themselves lacking the capabilities, volume or expertise to do the work. Hence they outsource."
Outsourcing typically takes place when it is compelling to do so from a cost perspective. Companies also outsource when they lack the capabilities, volume or expertise to handle the project or projects, Sumarta says.
"Think about the trend around personalized color statements or transaction documents," he says. "The majority of statements today are produced in-house. If you're a very large financial services organization, producing millions of statements on a monthly basis, you can probably justify new investments in color technology. But smaller, mid-size firms may not want or be able to justify these new investments. This makes outsourcing an attractive option for them."
"We see this outsourcing trend happening not just in statements or bills, but also in other types of documents such as marketing collateral," Sumarta says.
Pros and Cons of Outsourcing
Companies need to size up the positives and negatives before deciding to outsource, he adds. The pros tend to center on the cost savings that can be reaped from the outsourcing activities. Outsourcing also allows companies to focus their resources on their core competencies. Document printing is often viewed as a non-core activity for many entities. "[Outsourcing] can help you work toward compliances," Sumarta says. "A lot of time, the company to which the document is outsourced can do better, and has the expertise. That company can be more efficient [with the project]."
On the negative side, outsourcing by definition will result in some loss of control over the project. Fear of knowledge transfer, uncertain savings, and unmet expectations are among the risks of outsourcing, Sumarta asserts.
"There's also the issue of managing multiple providers," he says. "Not all providers have expertise across different types of documents. Some are good at doing marketing collaterals, some in statements, bills or direct mail. The printing industry is a very fragmented market. Not all print service providers are full-service providers."
It pays to keep work in-house only when businesses have the volumes and the capacity, Sumarta adds. With proliferation of digital output technology and adoption of production best practices, many enterprises recognize they can perform the work more cheaply internally, versus sending it out.
Selecting Outsourcing Partners
Companies seeking to outsource work should carefully screen vendors, Sumarta reports. InfoTrends recommends first asking for reference accounts, in which would-be outsourcing partners are asked to show examples of past and current clients. "It is good to know whether the outsourcing partners have experiences in dealing with similar-sized firms within similar vertical. This speaks to track record and vertical expertise," Sumarta says.
"Also inquire about quantifiable metrics that the outsourcing partner will use to gauge cost saving and overall performance of the outsourcing engagement."
After narrowing down the field to a handful of providers, the outsourcing company may do further due diligence, such as visiting the plant, inspecting the equipment, and meeting the team before making the final cut, he says. "You don't know if you like working with this company until you work with them," Sumarta says. "That's why references and case studies are important. Different companies have different requirements. When you're narrowing it down to a handful of providers, you want to make sure the outsourcing partner can meet most, if not all, your requirements."
Finally, undertake a careful cost comparison, to make sure the outsourcing partner meets your requirements and is competitive with other bids, Sumarta says.
One company with long experience in handling outsourced work is Affinity Express, based in Elgin, IL.
"All we do is graphic files," says vice-president of marketing Kelly Glass. "We don't print anything, don't make promotional products and don't embroider shirts. We provide a digital file used for printing, advertising, or to imprint promotional products."
Affinity Express works with printers and publishers that need help with their graphic services, Glass says. "It could be business documents, like letterhead," she adds. "They also send us promotional documents like flyers, brochures, and newsletters. Many use us as an overflow resource for excess volume. Or they might have extra work, but not enough to justify another person."
On other occasions, printers send Affinity Express the time-consuming, non-creative work their internal staffs aren't excited about performing, Glass adds.
Pluses and Minuses
What do clients gain from outsourcing to Affinity Express? First, they reduce their costs. Affinity Express prices jobs by the job rather than the hour. They deal with seasonality without paying overtime or hiring extra labor. And they don't need to worry about dealing with different versions of software and different programs. "They can sell more because they're getting more capacity from us," Glass says.
In addition, any quality printer will want to take on as much work as possible, she says. "We enable them to sell as much as their presses can handle. And we have a proprietary order management system that guides printers through all the details of a job, and ensures we get everything right the first time."
The jobs Affinity Express doesn't recommend outsourcing are those requiring a great deal of dialog and revisions with the client. "It would be better to do these in-house with the printer," Glass point out. "Talking to designers half a world away is not easy, and revision cycles drive costs up."
Choosing an outsourcing partner in design means selecting a partner with a large staff that's well trained, boasts the best in technology, and a good communication process. Affinity Express's clients typically find the company through its relationship with the National Association of Quick Printers (NAQP) and other groups like CPrint, an association of small commercial printers that aggregate their demand for insurance and paper, and gain best practices to help them operate more smoothly.
"It's a referral basis," Glass says. "We understand the need to meet deadlines, so we turn our products around in 24 hours or less," Glass says. "That's really helpful when printers are trying to sell as much as possible. They can wake up in the morning, and count on having their jobs done."
Jeff Steele is a freelance writer who specializes in the field of business management, marketing, and protocol, especially as they apply to wide-format printing firms. Contact him at scribsteel@americom.net.
author: BY JEFFREY STEELE