TIPS FROM THE FIELD
By Kevin McAdam
VP Sales, One Step Retail Solutions
As published in the Connection client newsletter
One of our veteran sales reps called me last week, all excited. He was going on
about how while everyone is talking about the economy and how many retailers
are being affected he can't help but notice the amount of expansion we are seeing
with our clients!
It's true, many retailers that we work with every day are not just slightly
expanding but massively; opening stores left and right, taking advantage of new
markets opening up, and experiencing some of their highest levels of growth ever.
Why is this when others are in the doldrums of the "bad economy" and "battening
down the hatches"?
I, for one, am sure that some of it has to do with their viewpoint (opportunity
always exists during times of adversity). I also can't help but notice that those
growth companies have a good technology system and a good technology
strategy.
But something that I want to address here is the idea that these companies are
focused on their core strengths internally and are leveraging others for areas that
are not specialized to their business. For example, merchandising, brand
development, marketing, store selection and development, supply chain; these
are core retailing strengths. Technology support on the other hand is not as core
to retailing.
Now, I do have a bias for this in that One Step has developed a business around
servicing the technology needs of retailers for the last 23+ years. It's our core
strength. With the product we support, Retail Pro, we are the largest and best in
the world at it. But it pains me when I see good retailers start to devote internal
resources to this challenging area that is not a part of the core strengths that
made them successful retailers.
Something like end user technology support is done more efficiently, of higher
quality, with less risk, and less expensively through a professional organization
that specializes in that, than it is when attempted as an offshoot of a successful
retailing organization. I have seen it too many times over the years that I know it
to be true.
But again, I do have a biased opinion on the matter so I want to devote the rest
of this article to an excerpt from a different article, written by a third party, that
provides some great research on outsourcing a function like this; when it makes
sense, how to judge if it makes sense, and what to look for to ensure it's
successful.
Enjoy the research below (I hope it serves you well) and, as always, I would love
to discuss this and any concept having to do with leveraging your technology to
your success. Just call or email me.
A recent Outsourcing Institute study found that while most enterprises try to
survive, the outsourcing industry continues to thrive.
A decade ago, cost reduction took center stage as companies sought short-term,
"band aid" solutions from outsourcing and received equivalent tactical benefits.
But, the market has turned. It's "do or die" and outsourcing is no longer about
cost savings. Now it's an essential revenue and growth strategy for every
corporation.
In this unpredictable—and mostly down—economy where most companies
struggle to "do more with less", outsourcing is not only a clever alternative to
hiring, but also a means to turn "big picture" goals into reality faster and more
effectively than ever—with measurable returns. Now everybody wants to plug into
"OPR"—other people's resources—and strategically focus internal resources
towards doing what they do best. No more, no less.
Top 10 Reasons Companies Outsource
1. Reduce and control operating costs
2. Improve company focus
3. Gain access to world-class capabilities
4. Free internal resources for other purposes
5. Resources are not available internally
6. Accelerate reengineering benefits
7. Function difficult to manage/out of control
8. Make capital funds available
9. Share risks
10. Cash infusion
Source: Survey of Current and Potential Outsourcing End-Users
The Outsourcing Institute Membership, 1998
Top 10 Factors for Successful Outsourcing
1. Understanding company goals and objectives
2. A strategic vision and plan
3. Selecting the right vendor
4. Ongoing management of the relationships
5. A properly structured contract
6. Open communication with affected individual/groups
7. Senior executive support and involvement
8. Careful attention to personnel issues
9. Near term financial justification
10. Use of outside expertise
Top 10 Factors in Vendor Selection
1. Commitment to quality
2. Price
3. References/reputation
4. Flexible contract terms
5. Scope of resources
6. Additional value-added capability
7. Cultural match
8. Existing relationship
9. Location
10. Other
Excerpt from article originally published by Tris Brown Brown on Free Article
