Thomas Friedman’s best-selling book The World Is Flat: A Brief History of the Twenty-first Century showed that digital outsourcing came of age in the confluence of cheap global infrastructure and Y2K. Twenty years on and the level of sophistication, creativity and interaction possible is much higher than it was.
Indeed, outsourcing has come a long way since the early days of where typically IT work was undertaken offshore and call centres were set up. Nowadays, technology enables better communication and enhanced collaboration that just wasn’t available in the early days of offshoring. From giants like Microsoft, Google and IBM to early-stage startups…everyone’s involved in offshore outsourcing. If these global brands and competitors are outsourcing, why aren’t you?
It’s likely a number of your closest competitors are also outsourcing, although you might not be aware of it. According to the ‘State of the Market for Offshore Creative Production’ report by TKM Consultants, 53% of agencies had partners in India last year. India is one of the largest outsourcing markets in the world. The time zone is a distinct advantage and many offshore partners work 24/7, as is the huge graduate and English-speaking talent pool. After the US, India is the second-largest English-speaking country in the world.
The cost issue looms large now, as Marketing Directors and CMOs are under pressure to prove the ROI on their campaigns and projects, something that hiring additional freelancers or extra staff make it difficult to achieve. The Covid-19 pandemic has significantly impacted the creative services industry with over half of marketers experiencing a decrease in their marketing budget according to marketingweek.com. Doing ‘more for less’ is now commonplace.
For many years, access to a lower-cost resource was the primary motivator for offshoring. An article published by Campaign Live highlighted how Nestlé was able to reduce production costs by as much as 80% using offshore production partners. For creative and artwork, production and digital work, using an offshore production partner can make significant savings for in-house agencies without any loss in quality.
Besides significant cost savings, it’s important to realize that there is a range of additional business challenges that are motivations for in-house studios to start their offshore search. The benefits of modern production outsourcing include:
- being able to meet tight deadlines for campaigns
- accessing a wider talent pool
- creating cross-media adaptations quickly.
For those IHAs not currently offshoring, reasons tend to include the inability to find the right partner and the misconception that offshore partners are only there only for scale. Others may have concerns about quality or tried outsourcing in the early days when it was a new concept.
The Bangalore call centres that Thomas Friedman visited in 2005 may have been the pioneers of early outsourcing, however the offshore market, and those that serve it, have certainly come a long way since the early days of outsourcing.
As satisfaction levels are steady and partnerships are developing based on trust, the offshore production service is set for strong growth over the next five years. In fact, brands and IHAs are predicting more investment in offshore creative production over the next 12 months. If you’re not outsourcing the creative production, isn’t it time you invested in outsourcing?
Robert Berkeley CEO of EKCS will be looking at this topic in more detail on 5th October 2021 at The Festival of Creative Operations. His session FOMO – Fear of missing out. Your competitors are outsourcing, why aren’t you? will take a look at modern production outsourcing and how keeping creative in-house, combined with a reduction in costs, can enable businesses to thrive and grow faster. If you would like to attend, grab your ticket now.