Digital strategy: Should you insource or outsource?
A complex issue that repeatedly seems to occur across the industry is whether or not a client-side organisation should either outsource digital activity to a third-party specialist, or develop their own internal capability. In the most simple sense, there are pros and cons for both approaches, but I suppose it depends on the both the wider the context and the overall digital objectives that are trying to be met.
Despite the death-of-the-agency rumblings across the industry, the majority of companies are still using digital suppliers. According to research, three quarters of Australian client-side organisations currently outsource some form of digital activity to external service providers.
However, there does seem to be a shift happening, especially as organisations are increasingly realising the importance of needing greater control over their digital assets, such as brand voice and customer interactions – all the more important in the emerging age of personalisation, individualised communication, and multi/omni-channel experiences.
As with any digital activity though, developing resourcing activity needs to be built around a solid digital strategy, where a structured approach is key.
With this in mind, a lot of organisations still seem to be building digital capability on a responsive basis, where there’s a clear reactional element to different circumstances, instead of a considered strategy.
For example, in recent years, this has been especially apparent across social media: it’s well documented that many companies have recruited for social roles in the past (at all kinds of different levels) in a knee-jerk fashion to the development of platforms and customer adoption. As a result, there’s countless #fail case studies littered throughout the industry, of which a fair amount could potentially have been avoided, had a social strategy been developed in parallel to resourcing considerations across a wider marketing and business context.
To insource or outsource?
Personally, I think there’s immense benefits to using external suppliers, especially where the limited internal resources and expertise of a business is taken into account.
Closely aligned with this is the importance of the supplier selection process, which in itself is a whole other article. As the digital landscape continues to become increasingly aggressive, ensuring that a service specialist can assist an organisation in successfully competing is all the more important.
An organisation should still retain ownership and ultimate control over digital elements, but there’s strength in using specialists to deliver the work. A good analogy might be that of a ship – there’s a Captain who sets the course, based on a particular objective, but a wider crew makes the ship move and keep it afloat; from steering the helm to unfurling the sails.
I’m not necessarily suggesting that all digital activity should be outsourced. And, to return to social media as an example of this, I think internally retaining the bulk of interactional elements can be extremely important. But I do believe that resourcing is a much more complex and broader issue than most people seem to think it is.
Alluding back to that an organisation should ensure that it sets a digital strategy, for either internal or external delivery, this starts to become more of an issue around digital knowledge and strategic skill sets within organisations themselves. This aside though, a robust outsourcing strategy should be developed if needed – although caution should perhaps be used if a supplier is helping develop the crux of this strategy, as elements of bias may come into effect.
Rightsourcing might be the best approach
Finally, as the ongoing CMO-CIO debate continues to rage across the digital industry, I think drawing on some IT terminology is especially useful to keep in mind when thinking about digital resourcing.
The term “rightsourcing” is something that should maybe be used more often amongst marketers, as it implies the use of contextual considerations to isolate where specific services need to be utilised externally from an organisations internal capability.
Sourcing opportunities should be part of of a structured strategy and should take multiple considerations into account. These should be tied to digital, marketing, and business objectives – all of which will be unique for each individual organisation.
Ultimately, no sourcing approach will be the same for organisations and structure is needed to understand and develop the best approaches across the relevant channels and goals – and within this, insourcing and outsourcing can be complimentary, not competitive – it just depends on what is trying to be achieved and who might be best to achieve it.
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