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To outsource or not to outsource

To outsource or not to outsource

While outsourcing of services has become an accepted part of Australian corporate life, new research has found many businesses are afraid to hand over their sales function to a third-party provider.

In a study released today, researchers from Monash University’s Australian Centre for Retail Studies identified the drivers and benefits of outsourcing the sales function, and the key strategic issues facing organisations involved in outsourcing.

Lead researcher Dr Sean Sands, said outsourcing could be an option for many businesses to win new customers and sell their products.

“While more than 70 per cent of organisations use outsourcing today to access benefits like cost savings, expertise and flexibility, as few as 12 per cent are willing to outsource their sales function,” Dr Sands said.

The research findings are contained in a new book, Death of the Salesman, published this week.

“There have been outsourcing successes in areas such as IT, finance, security and maintenance, but sales is often seen as part of the core business of companies, so there appears to be a fear of losing control if the function is outsourced,” Dr Sands said.

“Respondents also cited difficulty in sourcing the right partner, management and communications issues and staff loyalty concerns as other reasons they had not pursued the outsourcing of their sales.”

The research found this reluctance may be unfounded as organisations which had outsourced their sales reported significant benefits.

“We found significant benefits to the companies with improvements in efficiency and an optimisation of internal resources, often allowing for a stronger internal focus on areas such as innovation,” Dr Sands said.

“Outsourcing is not just about saving money, it enables fast growing companies to match the performance of larger organisations without the expense, and delay of acquiring expensive resources.”

The research also found many companies would continue with their current practices, but conceded that the current state of the economy and the high Australian dollar made outsourcing some business processes inevitable. The desire to cut costs and staff numbers was the major reason for the expected growth in outsourcing.

Dr Sands and fellow researcher Carla Ferraro will present the key research findings and reveal some important insights into the sales and acquisition function of businesses at seminars in Sydney and Melbourne this week. The seminars are sponsored by CPM Asia Pacific.

 

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