mailcom 2011 co sourcing: an alternative to outsourcing
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MAILCOM 2011- Washington, DC - February 28 - March 3
Course #: CM379
Title: Co-Sourcing: An Alternative to Outsourcing
Scheduled For: Wednesday, Round 7, 8:15 -> 9:15 am
Presented By: William L. Ware, CMDSM
James P. Mullan, CMDSM
Marlene O’Hare, CMDSM
Nick Staffieri
MAILCOM 2011 - Washington, DC - February 28 - March 3
Alternative Sourcing
The market has changed. With reduced staff and a smaller budget, businesses need to accomplish more with less resources. Alternative sourcing provides the answer.
What are your sourcing alternatives?– In-House– Out-source– Co-Source
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MAILCOM 2011 - Washington, DC - February 28 - March 3
In-House
• You retain complete control.• Beneficial if you have steady, year-round volumes.• Hard to adapt if there are peaks and valleys concerning
your mail volume.• You select the best people for your operation.• More difficult to remove/replace staffing.• Can be an expensive solution because you pay for
salaries/benefits.• Preferred if your organization’s primary business is in the
mail or closely related industry.• Preferred if there are no qualified out-source providers in
your area.
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MAILCOM 2011 - Washington, DC - February 28 - March 3
Out-Sourcing Benefits
• If done right, you can realize immediate savings and cost benefits.
• Allows you to focus on your core business and lets experts run your mail operations.
• Allows you to bring in subject matter experts (SME).• You are not responsible for staying current with state of
the art equipment.• Depending upon your contract, can help you share
liability issues.• Gives predictable and stable costs over the length of
your contract.
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MAILCOM 2011 - Washington, DC - February 28 - March 3
Downside to Out-Sourcing
• You greatly lose control of your mail operations.• You rely on them to provide the best people.• Can expose you to more risk.• Their quality standards may not meet your expectations.• An outside group is not necessarily familiar with your
operation and business.• May be an extensive learning period to adapt to client
expectations.• Longer term commitment, usually three years or more.
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MAILCOM 2011 - Washington, DC - February 28 - March 3
Definition
Co-Sourcing is:– defined as service performed by both internal
staff and external resources.– a business practice where service is performed
by staff from inside an organization and also by an external service provider.
– a partnership where all parties are responsible for the success of the project.
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MAILCOM 2011 - Washington, DC - February 28 - March 3
Co-Sourcing
• Is a combination of both in-house and out-sourced resources.• Allows you to mix and match resources.• The client has more flexibility.• You only retain the best resources to meet your needs.• Can be a bridge from out-sourcing to in-house.• Can be a bridge from in-house to full out-sourcing. • Get to see every day how a potential out-sourced staff
performs.• A co-source solution is less threatening to in-house staff.• Is the best solution for cyclical or variable needs.• Organizations that have peaks and valleys in their volumes
should consider co-sourcing.
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MAILCOM 2011 - Washington, DC - February 28 - March 3
Co-Sourcing Benefits
• Increased productivity• Improved efficiencies• Cost savings• Reduced financial burden• Control• Gain thought leadership• Concentrate limited internal resources• Manage a variable cost structure
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MAILCOM 2011 - Washington, DC - February 28 - March 3
Co-Sourcing Models
• Full-time on-site support• Part-time on-site support• Off-site support
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MAILCOM 2011 - Washington, DC - February 28 - March 3
Wanted from a Provider
• A shared vision• Quality• Price• Capacity• Relationship goals
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MAILCOM 2011 - Washington, DC - February 28 - March 3
Implementing a Sourcing Arrangement
1. Plan and assess – take stock of your current situation, develop your vision for the arrangement, identify potential providers.
2. Select the provider – check potential providers’ experience with like-sized companies in your industry, look for the ability to provide specialized skills and a global reach.
3. Implement – the provider should establish a time line and project plan, spell out its role in the enterprise, and its relationships with other functions.
4. Monitor and report – periodic ongoing communication is critical, regular contact between all parties, and synergies between the in-house team and the service provider.
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MAILCOM 2011 - Washington, DC - February 28 - March 3
Partnership Reasons
• Scope of consulting resources• Leading-edge technology• Global resources• Flexibility
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MAILCOM 2011 - Washington, DC - February 28 - March 3
Forging a Partnership
• Realize operational and financial efficiencies related to staffing costs and technology acquisition.
• Eliminate or reduce staff time spent on transactional activities.
• Become more efficient and effective in the delivery of services to your organization.
• Shift resources to other higher value or strategic areas.• Implement global program consistency, governance, and
reporting.• Mitigate the need to hire staff needed only during peak
periods or for special projects.• Access management expertise.
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MAILCOM 2011 - Washington, DC - February 28 - March 3
A Worthy Partner• Financial stability – if the company is public, review their past
financial statements and filings. If private, evaluate the strength of ownership, including any parent company relationships, request references and look at the company’s history of growth.
• Staff experience and expertise – this is critical if you want a truly consultative partnership. Are they thought leaders? Brainstorm with others about what you need in an outsourcing partner, and don’t be afraid to use a consultant to help with the process.
• Best-of-breed operational and technology systems – your provider should have top-tier technology. They should also work with their own strategic or outsource partners.
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MAILCOM 2011 - Washington, DC - February 28 - March 3
An Alternative Sourcing Plan
• Having an alternative sourcing plan is an opportunity that no organization, regardless of size, should dismiss without careful investigation.
• Organizations must change to survive and innovate to thrive.
• With an efficient and focused alternative sourcing partner ready and able to respond to your needs, organizations will be best-positioned to navigate the turbulent waters of both today and tomorrow.
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MAILCOM 2011 - Washington, DC - February 28 - March 3
Why Employ Alternative Sourcing Strategies?
• To put the right tools in place – at the appropriate cost.
• To gain or leverage expertise.• To avoid unnecessary capital investment
or infrastructure.• To free up resources.
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MAILCOM 2011 - Washington, DC - February 28 - March 3
Results from Alternative Sourcing
• Significant cost improvements• Gained business expertise and knowledge• New way of thinking• Executive/management time freed up• Flexibility and scalability
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MAILCOM 2011 - Washington, DC - February 28 - March 3
Opportunities for Alternative Sourcing
• Customer Service Support• Printing Services• E-commerce• Order Management and Fulfillment Systems• Enterprise Data Management• Remittance and Lockbox Processing• Enterprise Payments• Mail Services• Warehouse & Distribution• On-Demand Applications
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MAILCOM 2011 - Washington, DC - February 28 - March 3
The Process
Strategic Business Planning -
1. Pre-Research2. Resource Identification3. Criteria Establishment4. Due Diligence5. Decision Making6. Communication7. Execution and Evaluation
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MAILCOM 2011 - Washington, DC - February 28 - March 3
1. Pre-Research
• The million dollar question:
“What are we trying to accomplish?”
• Request For Information (RFI)
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MAILCOM 2011 - Washington, DC - February 28 - March 3
2. Resource Identification
• Due Diligence Team• Internal Resources• Existing Partners• Industry Experts• Consultants
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MAILCOM 2011 - Washington, DC - February 28 - March 3
3. Criteria Establishment
• Shared Vision• Quality• Price• Capacity• Relationship
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MAILCOM 2011 - Washington, DC - February 28 - March 3
4. Due Diligence
• Establish a plan• Go in with an open mind• Do not rush the process• Request For Proposal (RFP)
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MAILCOM 2011 - Washington, DC - February 28 - March 3
5. Decision Making
• Measure and evaluate pros and cons
• Conduct full cost analysis• Executive presentation /
recommendation• Contract negotiation
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MAILCOM 2011 - Washington, DC - February 28 - March 3
6. Communication
• Buy-in• Education• Community and media
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MAILCOM 2011 - Washington, DC - February 28 - March 3
7. Execution and Evaluation
• Execution and conversion• Clarity is the key• 2 companies = 2 languages• Project management• Resource allocation• Evaluation
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MAILCOM 2011 - Washington, DC - February 28 - March 3
Best Practices in Alternative Sourcing
• Identify benefits and risks of alternative sourcing to your organization.
• Determine methods of alternative sourcing that are best for your organization.
• Select the most appropriate business functions to out-source and/or co-source.
• Choose partners that are ideally suited to collaborating with you on these business functions.
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MAILCOM 2011 - Washington, DC - February 28 - March 3
Consider the Following:
• The goal is always Customer Satisfaction. Never lose sight of what drives your decision.
• The rewards must always out weigh the risks. Do not make a decision without weighing all the options. Do not make a decision to change your sourcing unless it fits your organization and corporate culture.
• Pricing is important, but not the most important variable. What good is getting the lowest price if the sourcing solution does not fit your needs?
• Timing is crucial, but not always a deal maker or breaker. Is it the ‘right time’ to make the deal?
• Knowing what to buy. What is the real ‘value-added’ that the sourcing provider will bring to your organization? Can you do it better and with less costs in-house?
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MAILCOM 2011 - Washington, DC - February 28 - March 3
Co-Sourcing: An Alternative to Out-Sourcing
Questions ?
Comments ?
Thank You
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MAILCOM 2011 - Washington, DC - February 28 - March 3
Contact Information
William L. Ware, CMDSMSenior Site ManagerOce Business Services, Inc.Time Inc.1271 Ave. of the Americas, SB-66New York, NY 10020212-522-9258 officemailroom@timeinc.com
Marlene O’Hare, CMDSMLinde North America, Inc.575 Mountain AvenueMurray Hill, NJ 07974908-771-1275 officemarlene.o’hare@linde.com
James P. Mullan, CMDSMNational Account ManagerOce Business Services, Inc.Chubb & Son15 Mountain View RoadWarren, NJ 07059908-903-2869 officejmullan@chubb.com
Nick StaffieriSenior Group Operations ManagerMCS Management Services1601 Market Street, Suite 800Philadelphia, PA 19103215-405-8190 officenick_staffieri@mcsmanagement.com
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