I believe in outsourcing. Actually, I believe in right-sourcing – using the best combination of resources (internal and external) to get the job done. But I’ll focus our discussion here on outsourcing – tapping into external resources.
With many pharmaceutical companies making massive cuts in headcount, outsourcing is an even bigger deal – because the work still has to get done somehow. So let’s talk about what your company is doing with outsourcing (we’ll focus here on sales training in pharma, but many of the principles applies to other divisions of pharma, and to other industries).
I see at least three levels of outsourcing typically happening, each of which requires different types of relationships with different kinds of providers:
1. Project – Very common form of outsourcing, where you contract with a company to create or perform something, while you still manage the overall process. Typically, there is a final deliverable at the end. Sales training departments work with external providers to develop launch training modules, workshops, digital tools – you get the picture.
2. Project/Process – When internal resources (personnel and infrastructure) are too thin to carry out an initiative, an outsource partner is often engaged to take over much of the project. Learning technology and data management is now commonly outsourced at this level with externally-hosted solutions. Large-scale meetings, with a million logistical details, typically come in at this level as well.
3. People; or Project/Process/People – Companies are demanding lower headcount and more flexibility, so the engagement of personnel from outsource providers is ramping up. Larger and more specialized companies are able to provide staffing in ways that avoid “hard” headcount, and in some cases, can also take over entire functions with both people and large-scale solutions. Building new capabilities and centers of excellence can be outsourced to companies with specialized skills, infrastructure, and people-expertise.
(Let me interrupt the flow of thought to remind you that Impactiviti can help you find right partners for all of these needs, including large-scale outsourcing. We’ve done the homework for you. Just call us at 973-947-7429)
Outsourcing can be scary business, so what most clients are looking for includes the following:
- Proven experience (at the level of service desired)
- Capacity and scale (the ability to nimbly and flexibly meet changing needs)
- Change Management/Process blueprint (for larger-scale outsourcing – do NOT underestimate this!)
As with everything, there are tradeoffs. Outsourcing has great benefits, but the more you outsource – particularly when you get to the “people” part of the equation – the less the training department may be a seedbed for deepening corporate culture. As one of my clients eloquently put it in a phone call last week, as leading employees rotate into and through the training department, there is an impartation and spread of corporate culture and values that may be lost if more central functions are outsourced. That’s a legitimate concern.
What other benefits – and drawbacks – are you seeing from outsourcing? Feel free to add your thoughts in the comments, or e-mail me (stevew@impactiviti.com) to extend the discussion. We’re going to see this trend grow and evolve – let’s prepare ourselves and each other by talking about it.
Recent Impactiviti posts:
Doing Digital Learning – the TWO People you Need
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One inevitable side affect of outsourcing is the onshore employees feeling demoralized and insecure. This hampers performance as they feel threatened by the offshore employees. If not carefully communicated, it can be a double whammy for the business if onshore employees are sold on the idea that offshoring can help the business.
Peter, off shoring is one aspect of outsourcing, but only one part. A lot of outsourcing is done within country. But demoralization can be a problem in either case…
I mean ‘NOT SOLD” on the idea.
You’re right that this is a huge issue in pharma today, and is only going to get bigger and more relevant for more people.
I think a lot of the reflex response is based upon the way it’s framed. Outsourcing can mean anything from a call center on the other side of the world having a difficult-to-understand conversation with someone who’s been poorly informed… to working side by side with a brilliant consultant. Whether the outsourcing is done right is dependent upon the homework that goes into it – which I’m sure is improved when you help!
Outsourcing is a fact of life. I outsource my accounting – GLADLY! Sometimes it makes sense to outsource, sometimes to stay completely inside, and sometimes a hybrid approach is best. And that all depends on the circumstances – there is no one RIGHT answer for every company/every time.
I’m in the Legal Services space, which is comparitively in its infancy with respect to the outsourcing you’re used to. The legal services delivery model is still largely mired in the “bundled” approach to outsouring. That being, what I can’t handle internally, I just give to my external law firm (with inflated blended rates). The new trend is to “un-bundle” task level work to outsourced options either offshore or best-shore. But the hurdle for corporate counsel becomes control of work product, and candidly — the politics of explaining to a CFO why there have been unrealized opportunities for savings (until now).
From a pharma sales training standpoint, I think we’re seeing not just the continued outsourcing of work (such as content creation), but an increase in both the amount and type of outsourcing.
Traditionally we’ve seen a lot of project based (a POA meeting, a cross-training, a product launch, etc) outsourcing where vendors provide specific, time/scope boxed activities, but now I think we’re starting to see strategic outsourcing to companies that can provide a suite of services that departments need.
And why they need that is pretty obvious – with more and more downsizing, there is just not enough staff to do it themselves anymore.
Braydon – agreed. Strategic outsourcing may have been less popular in “fatter” financial times for pharma, but now it’s becoming a new normal – to some degree.
Steve, this is a great topic for these challenging times. While many have a negative view or are threatened by outsourcing, I think increased outsourcing trends are a boon to entrepreneurs who prefer to work for themselves. As you point out, the question isn’t whether to outsource or not (who does their own legal?), but rather WHAT should/can be outsourced and HOW can it be done successfully.
Kevin – agreed. If you get the right people/companies to outsource to, it can definitely be a win-win.
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