Out-Sourcery

This weekend is still a marketing weekend here at RightSite – getting ready for our email campaigns, preparing our promotional materials, and making sure we have all those tools we need to show how sexy industrial property can be.

And I’m getting this done all by myself.

Well, not really completely on my own, but right now I am the only member of RightSite working on our marketing, and the reason that we can still achieve our goals is not because any one person can be so wonderfully productive. Nobody is that effective. Nope, we are able to run this stage of our marketing with a small team because of outsourcing.

With skilled managers and staff being scarcer than ever this year, we have decided against hiring our own in-house design team or production team and are opting to outsource all of our marketing materials design and production. Beyond marketing, outsourcing is a major element of our strategy for RightSite. Here’s a quick list of the functions that we are already outsourcing, or are planning to outsource:

• Marketing design — have outsourced some key functions to Paper Stone Scissors
• Marketing production — are requesting quotes for this now
• Financial and tax reporting — will be deciding on a vendor this week
• Web development — already outsourced to Revere Group
• CRM development and network maintenance — already outsourced to Viallet & Associates

We don’t look at any of these functions as being core activities, nor are they tasks that our existing team members have the skills to take care of at a high level. We are also betting that, given Shanghai’s competitive business environment, we are able to find outside vendors that can provide quality services at rates that would be similar to the cost of taking care of these functions in-house.

So I am spending my time writing project briefs and meeting with professional service companies, rather than leading our own teams (or trying to do all this stuff myself).

There are a few other tasks that we could take care of externally, that we will perform directly. For instance,

• Event planning — we have lots of experience at this in-house
• Media relations — am pretty confident that our Rolodex can top those of most PR agencies
• Marketing communications — what better wordsmiths are there than former magazine folks?
• Sales — Only crazy people outsource their sales

Ultimately, it may be more costly to outsource all of these functions than taking care of them all by ourselves. But we are hoping that this additional cost may be offset by the following advantages (brace yourselves for another list):

• Better use of management time – as the manager of this business I need to spend my time on selling and promoting the company. Not designing media kits.
• Faster results — in-house projects have a nasty habit of running behind schedule. (And if a vendor of an outsourced service fails to deliver on time, then we typically have recourse)
• Higher quality products and systems — most of the money that a company like ours might save on doing these projects ourselves would most likely be gained by employing lower cost staff than those used by the outside vendor. Unfortunately, low-paid employees often perform like low-paid employees
• Reduced overhead — outsourcing helps us keep our team size low, which means we can have a smaller office, spend less time on recruitment and keep a handle on many costs which tend to be driven by headcount.
• Flexibility — as a brand new business, we cannot be sure from month to month what our needs will be. Using an outside vendor can allow for more agile management than building up our own team.

So while it may be too early to tell the final result, we are feeling pretty good about our outsourcing strategy. If any of you think we might benefit from a different approach, I would be glad to hear about it.

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