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October 12, 2007

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Daljit B

This caught my eye as well as a very interesting and much anticipated move. With the extent of wage inflation at the moment there is growing pressure on agency profit margins so I think 'PR Outsourcing' will be back on the agenda for many agencies. There is a huge amount of time intensive admin/reporting work from compiling coverage books, coverage analysis, blog monitoring, activity reports etc, etc, which I can see being tempting targets to transfer to India and elsewhere.

I really can’t see media relations being outsourced in such a way however. I don’t think agencies would risk their reputations and I can’t see many clients being happy with the practice either!

Andrew Smith

If the average agency spends nearly 70pc of its time on account management, reporting and admin (PR Week 2006), then the attractions of cheap offshoring are obvious - in theory it should mean freeing up people at all levels to do more value added activity (eg media relations, biz dev, strategy, etc - or require the agency to employ fewer people to generate the same or higher output - however, it isn't necessarily a silver bullet - I've heard from people in other sectors eg market research, who've tried outsourcing low level back office admin - and they've been very disappointed - one person told me they lost a major client due to poor service delivery from the outsourcer - so will be very interesting to see how Text 100 get on....

Daljit B

I think it will be an easier process for agencies with actual offices in India etc, which perhaps explains the focus being placed on the BRIC nations and Eastern Europe in the global expansion plans of many agencies. If the 70% figure is representative (I've never run/come across a campaign running on that ratio) then that is the underlying problem which really needs to be resolved.

Madhuri

Hi,

I've been following your discussions about our (Text 100's) initiative. Just thought I'd join in to add a few comments myself. The sense I get is that you would view this as just a direct cost arbitrage to engage "cheap labor" for low value tasks.

That however is not how we have approached this. Our focus is improved efficiency, performance and speed that a global virtual team can offer over just a local one - at an improved cost:value ratio. At the least the service quality would have to be at par.

We are conscious that over a period of time, execution of most tasks globally across most industries will become location agnostic, with price/ cost flattening enough eventually – so that the absolute price becomes just the hygiene factor. It would not matter whether your team mate sits in the same or another location in the same city, country or continent. The choice of engaging each person would ultimately depend on their ability to deliver and their availability of time; as long as that company has invested in the right infrastructure and training required to keep a virtual team productive and efficient. Not just technology, but the company’s ability to inculcate uniform values, ethics and a uniform strategic approach backed by strong processes and agreeing rules of team engagement is key to this.

Daljit is astute in observing that it would be easier for companies with offices in these countries. Text 100's India team is one of its oldest and largest. Our offices being technologically and culturally integrated following common methodologies and best practices, puts us in the best position to work in virtual teams seamlessly.

We are taking this in slow and steady steps and not rushing in where angels fear to tread :). Our key guiding star is client and internal team feedback on a constant basis, as we grow this out of the "petri dish" (please excuse the mixed metaphors). So it is unlikely that we would be hit with a drop in service quality owing to this approach without us seeing it coming way in advance.

Flour Mill

I'll follow you there. RL interevened and I was not able to check out a lot of stuff. Now that I am back am doing it with a vengeance.

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