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The new age of outsourcing

01 Nov 2009

Keeping everything in-house may no longer be the best move, in terms of containing costs and generating fresh revenue.

In 19 years of technology sales, I’ve never encountered a more appropriate time to outsource aspects of business development.

Savvy companies are now increasing outsourcing in high-end revenue generation. And it’s no longer just in the  wellestablished areas of telemarketing, the helpdesk or at trade shows. They’re outsourcing in the areas of territory  management, channel development, SME growth, and in internal sales.

Sometimes outsourcing programs are launched to cut sales costs, improve efficiency and tactical  flexibility, and accelerate revenue. But that’s only half the story. Outsourcing also lets companies concentrate on sales activities where they add the most value.

A sales model of the future Interestingly, the data available on sales outsourcing suggests a boom. For example,  Gartner predicts business process outsourcing (which includes sales) is growing annually by 9.5%.

Another trend, suggested by some authors, such as in Making The Numbers – a book on sales benchmarking – predict “virtualised” organisations. They advise outsourcing everything in sales, except for an essential core of high-value activities.

Five timely areas to outsource in sales1 An audit of resellers & end users. Useful to ensure end-user needs are being met – whether you’re a reseller or   product developer – or gaining feedback on a proposition to the market. It’s often difficult and expensive for   companies to collect information on their markets and resellers. This is where a specialist technical IT outsourcing  provider can assist.

2 Collaborative partnering & reseller development.As I mentioned in last month’s issue of The Channel, CEOs are making collaboration a top priority. The example I used showed how storage maker EMC credits its alliance    relationships for rapidly helping to boost services from less than 10% of revenues to 16%.

The irony is that managing multiple collaborative partnerships may require systems and investment that can be uneconomical to do in-house.In short, channel and collaborative sales partnerships represent an ideal opportunity for outsourcing.

3 Coverage of SME & secondary markets.Moving into an SME sector for the first time can create the need for   different sales methodologies and increased marketing resources.

And that’s not all. Direct and hidden sales costs rise fast when deploying segmented in-house sales teams. Outsourcing firms fill the gaps. Some specialists in larger markets, like the United States, even maintain teams equipped to address  attractive but hard-to-reach markets, such as the health industry and government.

4 Outsourced direct sales.In a tight economy, you may wish to look hard at this option. When the market demands a direct presence, outsourced  firms can deliver a sales solution. This can be ideal if you want to avoid the risks, fixed overheads and delays in building your own local sales team.

5 Virtual team management for small teams.One obvious driver behind this is simply deciding that managing sales  teams is not your organisational core competency. Moving sales management of small teams to a virtual model offers the potential for significant savings in salary and opportunity cost. This is especially the case where managing directors  and general managers are managing the sales process themselves.

This is the time to outsource in sales As you may know too well, hiring and managing sales and marketing teams for  all possible geographies, sectors and product ranges can be expensive, with no guarantee of results. And consider that  an economic slowdown may not eliminate your company’s growth capacities.

Outsourcing in sales addresses both fiscal concerns: cutting costs and generating new revenue.

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