One Blog |June 10, 2013 | POS Tracking Software
Outsource Your Printing — But Do Not Outsource Your POS Marketing
The purpose of this blog is to give you an introduction into the subject of outsourcing your print operations — Especially within that portion of the consumer goods industry which focuses on the manufacture and distribution of beverages — both alcohol and non-alcohol. (Note 1)
Noticed we’ve said outsource printing only - Not the marketing functions that include point-of-sale (POS) content creation and other key, related marketing functions. Most beverage companies consider the latter to be core business functions that should be closely reviewed before being outsourced.
Out-source vs. In-Source Printing?
We’re discussing this topic in response to questions that we have received regarding the features and benefits of our software products and how they relate to outsourced printing. We’ve heard directly from our target market (beverage suppliers and distributors) that using our software products means that printing must be brought back ‘in-house’. (In-sourced)
For now consider that with OnTrak you can get the best of both worlds. ‘Out-sourcing’ the non-core business function of printing, while ‘in-sourcing’ the tracking, measurement and management of all the core business functions of POS creative, cost tracking and bill-back recovery.
When you choose to out-source this non-core business processes, you'll have more time to concentrate on the important, core business functions of manufacturing, logistics, distribution and marketing and sales.
So the assumption that deploying OnTrak’s POS marketing management solutions means that you must in-source your printing function is false. Our software can be used to your advantage regardless of your choice to print using your own print shop or an outsourced printer.
Outsourcing - Pros and Cons
Outsourcing any non-core business process may mean greater organizational flexibility and generally may help improve your financial statements — but outsourcing is not without its issues. Any consumer goods company: manufacturer, supplier, distributor or retailer looking to outsource any business process should evaluate both the pros and cons of outsourcing before moving forward.
Here are a few things to consider:
- Cost reduction - The potential for lower cost of operations achieved by outsourcing non-core business processes can make outsourcing very attractive.
- Outsourcing reduces — and sometimes eliminates — operational and management distractions. When certain functions of an enterprise become difficult to control or unwieldy, outsourcing may help to overcome such difficulties.
- Outsourcing of non-core functions, may give you more time to focus on the core functions of your business. Simply put, outsourcing such functions as payroll processing, benefits administration, printing, back-office accounting and many computer network operations helps to put the focus back on the core functions of the business — such as marketing and sales.
- Loss of control — Giving the responsibility for even non-core functions to an outside firm may cause a company to feel a lack of control or oversight of certain business functions. This may mean that you no longer are able to exercise the control you used to have over certain parts of your operations and their deliverables. That’s not bad; just different.
- Risk — With this lack of control there may also be some risk of the loss of confidential data and the potential competitive disadvantage that can result. It is important, therefore, to have strong systems and procedures in place to avoid the issues associated with data loss or corruption. Nothing too scary, but something that has to be managed differently.
While there may be some potentially scary cons, generally speaking, outsourcing non-core business functions is generally viewed positively — that is, outsourcing of non-core processes can provide value to an enterprise.
Our position on outsourced printing for the beverage market is this:
If your printing costs can be lowered, or your POS print quality and materials can be improved by outsourcing, you can still use OnTrak’s products to track, measure and manage your POS ordering, content creation work-flow and reporting (to account for and recover all available supplier bill-backs.)
On the other hand, if your printing infrastructure and cost associated with keeping your print function is best kept in-house; you can use OnTrak’s products with the same identical benefits and the same ease-of-use as the enterprise that elected to outsource.
Either way you win with OnTrak.
Our POS tracking applications will provide you with a powerful set of tools that will lower your POS costs, improve your POS time-to-market, and increase your supplier bill-backs.
A competitive advantage regardless of where your POS is printed.
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Note 1: The consumer goods industry generates revenues of over $2.1 trillion annually in the US alone, and contributes over $1 trillion in added value to the US economy per year. Consumer goods include such items as beverages, grocery items, sundries, and consumer electronics. All beverages (alcohol and non-alcohol beverages) account for approximately 65% of total CPG revenues. Source, reports from: AT Kearney, Forrester Research, GMA, McKinsey & Company.