Battling an Emerging Outsourcing Trend

It is interesting to try to identify an emerging management trend that will impact the graphic arts industry. Most tends start in the general commercial business world and are adopted by industry consultants to support their ideas. An article in Forbes entitled “Top Three Trends In Performance Management In 2022” describes one trend that could impact in-plant printers which is the impact of hybrid work. In this article, we will discuss these new messages, identify what is being said, and then propose a strategy to prepare for this trend.

There is a new trend that has been fueled by the pandemic promoting the outsourcing of in-plant work. Two industry consultants are spreading this message. One is Rodger Gimbel, who is the president of Rodger Gimbel and Associates, and the other is Kemal Carr, the president Madison Advisors. Here are some of the messages they are promoting.

Rodger Gimbel spoke on Impressions Exchange recently and said, “There is a whole lot of opportunity right now with in-plant printers. The biggest opportunity of the pandemic is the downsizing of in-plant organizations. Corporations who don’t need a large print facility to service 8,000 people in the building when only 2,000 people are coming in twice a week. So these companies are beginning to downsize and are using a hybrid solution in which they are going to farm out more of that work.”

Kemal Carr has been discussing a shift to more outsourcing for years. In an article in Mailing System Technology called Zero-Risk Outsourcing, Carr claims that outsourcing offers many benefits, including lower total cost of ownership, reduced risk of technology obsolescence, and enhanced systems integration.

In the August 2022 Issue of DPS Magazine he said, “I think it’ll be harder for companies to continue to do transactional work in-house at scale. Businesses, large and small, have been impacted by the COVID-19 pandemic, and, in some cases, their entire business models have changed. This triggered some strategic thinking about what to do with currently owned or rented office space, particularly because letting much of it go can deliver positive results to the bottom line. With the looming labor crunches and the rising demand for new digital communication options, as well as the affordability of printing in color, outsourcing will continue to be increasingly attractive to many enterprises.”

In addition, in a recent blog entitled, Did COVID-19 Drive a Move to Outsourced Printing Services? Carr wrote, “Outsourcing can turn capital expenditure into a more balance sheet-friendly operational expense by eliminating the need to accommodate an in-house print and mail center, purchase and install equipment and hire and train competent people to manage it, while at the same time ensuring the work gets done appropriately and on time.”

Avoiding the Blindside, Prepare Your Message

The worst possible situation is if you are blind-sided by these messages. Therefore you should prepare your research and some facts in your defense just in case someone in your company starts quoting these messages.

• Is it true that staff in your building has been permanently cut, or is it temporary? Is it true that you are still using pre-pandemic staff? Because most in-plants are not.
• Does outsourcing offer a lower total cost of ownership? Does that analysis include the increased fees for rush jobs? Because they typically don’t. Do you know what portion of our work is done on a rush basis? It is fairly high. What about the file repair or hand work cost? Do we perform that at no additional cost?
• Is your shop taking up valuable space within your building? Is it truly valuable, or is it in an unattractive part of the building, such as the basement? If it is a high-value space, would you be willing to relocate? There are great stories about in-plants that moved and are still providing excellent service.
• Is it true that eliminating the in-house print and mail center would make a better balance sheet? Or is it more likely that the responsibility would be spread across the enterprise and make it impossible to track and evaluate?
• Is it true that commercial printers can provide better service than in-plant? Will they put our organization first when a more extensive client might have the same deadline? Will the delivery be as fast? Or will it have a longer delivery time and possible additional cost?

Are you struggling to hire new staff? And is that impacting your service? If that is true, you need to kick that effort into high gear because that may be the hardest counterargument.

If you need some new ideas to help, contact me at (720) 872-6339 or email me at howie@howiefentonconsulting.com.