To outsource or not to outsource? Veritek Global managing director Jim Edgar takes a look at the pros and cons of handing over your digital signage service and support to another firm.
Almost every digital signage business has to determine, at some point, whether they should perform service and support themselves or outsource it to an external provider. At first glance, it does seem counterintuitive for a company to outsource highly visible and important services. Most of the outsourcing pros affirm that it saves time and money, but in order to do it right and not achieve the opposite effect you should analyse some nuances.
First question: how wide is the task you want to outsource? Parameters to take into account include the number of people involved from your side, and the time and resources demanded. Before deciding to outsource, it is always a good idea to create a formula to quantify your costs and benefits and to prove that outsourcing has a long-term benefit or a short-term gain – don’t hesitate to use your own variables to reach a conclusion. Obviously, saving costs is a key consideration but generally it is not the sole purpose of outsourcing.
Whether you sign a contract to have another company perform the function of an entire department, or just a single task, you are turning the management of that function over to another company. True, you will have a contract, but the managerial control will still be elsewhere. So you need to ensure that the outsourcing company is driven by the same standards and mission as yours.
However, when you look at all the things a company has to do to deliver services in-house, keeping them running to a high standard and consistently meeting customer service level agreements (SLAs), it becomes evident why many companies choose outsourcing rather than an in-house solution.
For some outsourcing is a necessity, but for others it’s just a business decision to maximise profit. Many large companies have been forced by the recession to cut costs and chose outsourcing by necessity, which has stirred some controversies. For them, the main advantage of outsourcing is undoubtedly the cost saving element.
If you add up the costs of taking on fully employed staff members, training, tools and the costs of vehicles, it often becomes a simple decision to outsource service and support.
Removing fixed overhead costs and raising the predictability of variable costs is often another welcome benefit of outsourcing. It can also allow a company to focus on its core business tasks such as product development and sales – the company can then direct investment toward the main processes of the business, leaving aside the non-essentials.
On the other hand, despite its many obvious advantages, outsourcing can cause much debate among key decision-makers. Some may have had negative experiences caused by outsourcing to inconsistent and sloppy delivery businesses that have diminished their brand image. For others there may be a concern that you will lose the important daily customer contact.
These are real issues that only careful planning and implementation with a practised and experienced partner can resolve. Protecting the brand and maintaining customer relationships are not incompatible with outsourcing, but they are challenges to be recognised and met. Good outsourcing will deliver against these challenges; a poor solution will not.
Ultimately it’s all about finding a partner with similar values and skills, and with an outstanding reputation for quality delivery. A professional outsourcing partner can tailor solutions that ensure a high-quality service, keep the customer happy and help enhance your product and brand while reducing cost.
The relationship between the company outsourcing and the chosen service provider must be extremely strong. The engineers fulfilling the service on-site are your company’s ambassadors and you need to be confident that you will be represented in the right way.
A highly adaptable service-delivery partner with a proven background of successful diversification is important. Key considerations here include engineers that are quickly trained on new products and can be deployed to meet demand peaks, such as large-scale installation projects.
As a recent example of this adaptability, Veritek recently relocated and installed interactive digital signage at the Westfield Stratford City shopping mall in London, just in advance of the Olympics. The team of engineers stepped in at the last minute, without specific training, and delivered a complex project in line with ISO standards and conforming to stringent health and safety requirements during night-time hours. This is the kind of expertise that outsourcing can provide.
Veritek maintains large estates of complex equipment in a wide range of sectors, from photo imaging through to healthcare, digital cinema and kiosks. More recently it has entered the graphics and digital signage sectors too. Veritek Global employs over 240 engineers across Europe.