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Why Outsource
Outsourcing Lead Generation
In today's hyper-competitive global markets, organisations must focus solidly on their value adding activities. The modern enterprise must concentrate on its core competencies, which means that successful enterprises routinely outsource activities, such as Information Technology, that were once considered competitive advantages. The benefits of outsourcing are clear: a competent specialist organisation can achieve the kind of cost savings that cannot be made by a single enterprise’s in-house operation. For the high-technology enterprise there can be major advantages in outsourcing marketing processes, especially the sales lead generation process. These benefits include:
- reducing costs
- eliminating management distraction
- having access to a flexible and scalable sales force.
The most important of these is flexibility and scalability. An in-house operation is effectively a fixed resource at a fixed cost. When you lose in-house people, you have to recruit and train to replace them, which costs both money and time. When you are trying to fill the pipeline or open a new territory, the lost opportunity cost of losing internal people can be high: you cannot quickly change tactics to take advantage of a competitive failure, or scale back resources to keep pipelines at an optimal level. Peter Drucker says it much better in Managing in Turbulent Times: ‘the enterprise has to be kept lean and muscular, capable of taking strain but capable also of moving fast and availing itself of opportunity. This is particularly important if such times follow long years of comparative calm, ease and predictability.’
Cost reduction is examined more closely in our Return on Investment model. In brief, an activity-based view of the internal costs shows that process costs can vary enormously depending on capacity and activity levels; and this does not include lost opportunity cost and management distraction. A more sophisticated understanding of costs will often show that outsourcing is cost beneficial. The most immediate and obvious benefit of outsourcing sales lead generation processes is that it virtually eliminates management distraction. Senior sales management time is better spent in the field than coaching internal marketing staff. The in-house process is often managed by hard-working people with no sales management experience. In the outsourced model, sales management can hold the provider organisation accountable and stay in control in a way that is not always possible when the process is carried out in house.
