TIPS FROM THE FIELD
By Kevin McAdam
VP Sales, One Step Retail Solutions

As published in the Connection client newsletter

One of our veteran sales reps called me last week, all excited. He was going on about how while everyone is talking about the economy and how many retailers are being affected he can't help but notice the amount of expansion we are seeing with our clients!

It's true, many retailers that we work with every day are not just slightly expanding but massively; opening stores left and right, taking advantage of new markets opening up, and experiencing some of their highest levels of growth ever. Why is this when others are in the doldrums of the "bad economy" and "battening down the hatches"?

I, for one, am sure that some of it has to do with their viewpoint (opportunity always exists during times of adversity). I also can't help but notice that those growth companies have a good technology system and a good technology strategy.

But something that I want to address here is the idea that these companies are focused on their core strengths internally and are leveraging others for areas that are not specialized to their business. For example, merchandising, brand development, marketing, store selection and development, supply chain; these are core retailing strengths. Technology support on the other hand is not as core to retailing.

Now, I do have a bias for this in that One Step has developed a business around servicing the technology needs of retailers for the last 23+ years. It's our core strength. With the product we support, Retail Pro, we are the largest and best in the world at it. But it pains me when I see good retailers start to devote internal resources to this challenging area that is not a part of the core strengths that made them successful retailers.

Something like end user technology support is done more efficiently, of higher quality, with less risk, and less expensively through a professional organization that specializes in that, than it is when attempted as an offshoot of a successful retailing organization. I have seen it too many times over the years that I know it to be true.

But again, I do have a biased opinion on the matter so I want to devote the rest of this article to an excerpt from a different article, written by a third party, that provides some great research on outsourcing a function like this; when it makes sense, how to judge if it makes sense, and what to look for to ensure it's successful.

Enjoy the research below (I hope it serves you well) and, as always, I would love to discuss this and any concept having to do with leveraging your technology to your success. Just call or email me.

A recent Outsourcing Institute study found that while most enterprises try to survive, the outsourcing industry continues to thrive.

A decade ago, cost reduction took center stage as companies sought short-term, "band aid" solutions from outsourcing and received equivalent tactical benefits. But, the market has turned. It's "do or die" and outsourcing is no longer about cost savings. Now it's an essential revenue and growth strategy for every corporation.

In this unpredictable—and mostly down—economy where most companies struggle to "do more with less", outsourcing is not only a clever alternative to hiring, but also a means to turn "big picture" goals into reality faster and more effectively than ever—with measurable returns. Now everybody wants to plug into "OPR"—other people's resources—and strategically focus internal resources towards doing what they do best. No more, no less.

Top 10 Reasons Companies Outsource
1. Reduce and control operating costs
2. Improve company focus
3. Gain access to world-class capabilities
4. Free internal resources for other purposes
5. Resources are not available internally
6. Accelerate reengineering benefits
7. Function difficult to manage/out of control
8. Make capital funds available
9. Share risks
10. Cash infusion

Source: Survey of Current and Potential Outsourcing End-Users The Outsourcing Institute Membership, 1998

Top 10 Factors for Successful Outsourcing
1. Understanding company goals and objectives
2. A strategic vision and plan
3. Selecting the right vendor
4. Ongoing management of the relationships
5. A properly structured contract
6. Open communication with affected individual/groups
7. Senior executive support and involvement
8. Careful attention to personnel issues
9. Near term financial justification
10. Use of outside expertise

Top 10 Factors in Vendor Selection
1. Commitment to quality
2. Price
3. References/reputation
4. Flexible contract terms
5. Scope of resources
6. Additional value-added capability
7. Cultural match
8. Existing relationship
9. Location
10. Other

Excerpt from article originally published by Tris Brown Brown on Free Article