13 November 2006
Linda Fisher
Linda Fisher

"Corporate executives are facing a real dilemma: should they maintain in-house creative services departments, or outsource this work? In my view, it all boils down to core vs non-core competencies."--Linda Fisher

Core vs Non-core
For almost all corporations, in all sectors, creative services are non-core competencies. The crafting of the corporate image, and the all-important brand message has generally been relegated to this category of "non-core competencies," as well. Corporate executives continue to grapple with this issue, and have to make tough decisions: should they maintain an in-house creative service department in today's soft economy? Or should they outsource these functions to design firms whose core competencies are creative services?

Why do some corporations opt to create expensive, in-house creative service departments? What is the benefit to them vs outsourcing, anyway? Have you ever solicited projects from prospective clients within your target industry, to be told that these functions are performed in-house? Have you wondered what the reasoning is behind corporate management's decisions?

Why Creative Services Are Taken In-house
Corporate executives go this route because they are able to maintain control of all systems, procedures and proprietary data. For them, the additional costs of staff, technology and supplies for a creative services department are worth the control they get in return. They also like the quick turn-around time or timeliness in which projects are done. Corporate management feels that it usually takes outside creative firms time to understand their brand, the market and the culture of their businesses. Inside staff, on the other hand, can be imbued with the corporate message day in and day out.

In-house mandates include, first and foremost, maintaining the integrity of the Brand(s) as set by the Brand Standards manual. Brand managers oversee all activities, in-house and outsourced, that involve all design applications of their brands. Their goal is to make certain that the brand identity remains consistent and true to the specifications outlined in the Brand Standards manual.

The work of an in-house creative department communicates the company brand to clients, and consumers, in B2B and B2C situations as well as to the key publics and stakeholders. Brand managers must therefore manage the company brand(s), and work closely with in-house creative departments to make certain that everyone's work is "on message" with the brand management plan. In-house creative departments should work hand-in-glove with the marketing department for the same reason. Corporate marketing and creative departments must properly convey the brand message at all times, in a consistent manner. This is best accomplished if they work in concert.

The question is: can corporations cultivate great in-house design talent compared to using the services of outside design firms? They can if they commit themselves to it. Hiring strong in-house talent is a must if their creative output is to equal, or exceed, the quality of the work done by outside design businesses. Exercising corporate discipline is another must. Setting performance standards and creating challenge for an in-house design staff is incumbent on the company. Corporate designers should be held responsible for learning all about their company's core business, and for protecting the integrity of the Brand. They must be held accountable for delivering high quality design while interfacing with their peers in other departments in the corporate environment. Then, an in-house department can truly pay for itself.

Why Corporations Outsource
Outsourcing became a widely accepted practice in the 1990's. Considerable pressure is on business to become "leaner and meaner," that is, more productive, more competitive, more profitable. Particularly for publicly traded corporations whose executives must answer to its shareholders and Wall Street. The challenges corporations faced ten years ago, have only intensified. As a result, many corporations continue to outsource more and more of their non-core competencies.

The way corporations outsource, however, has changed. In most cases, outsourcing has gone from a department level purchase of services, to an integrated process buy. While buyers seek topnotch design firms to collaborate with, they rarely make the final decision as to which firm they will end up working with. Many of these decisions are made by corporate committees. The vast number, and choices of service providers has exploded--making it more difficult, not simpler, for corporate buyers of services, creative included, to make decisions. Decision making and corporate operations have gone global.

Corporate buyers of creative services are seeking more than a cost savings when they seek outside agencies. They are also looking for design firms who understand their needs, offer deliverability, flexibility, high quality and innovation. Overall, the most critical factor is that many corporations view outsourcing of creative as a proactive strategy to improve brand management.

In a 2002 interview, Joe Melanson, VP of Aquent, the largest creative services solutions provider in the world, said: "Many overlook creative services as a natural opportunity for business process outsourcing. Or many think they are outsourcing by sending specific projects to outside firms as a short-term tactical solution. But strategically outsourcing creative services is unique and growing. We expect it to be common practice in the next decade."

Coming in Part 2: How to position your design firm to take full advantage of the corporate outsourcing wave.

About this article
This article was written with the assistance of Claire Ratushny and originally published in Design Management Resources' free newsletter, read in over 40 countries: "Marketing & PR Exclusively for Design Firms" Click here to subscribe.

About Linda Fisher
Linda Fisher is founder and president of Design Management Resources, Inc. She forms strategic partnerships with her clients by consulting with design firm principals to define their mission, position and business goals. Ms. Fisher is a regular on the speaking circuit and conducts intensive workshops to educate design firms about sound business tenets. She has written numerous articles for internationally recognized publications, including How Magazine and Communication Arts. She also writes an international newsletter, "Marketing + PR Exclusively for Design Firms", which is read in over 40 countries.

About Design Management Resources, Inc.
Based in the United States, Design Management Resources provides strategic consulting for design firms who are global leaders - or aim to be. The company specializes in:
- Living Marketing Plans
- Public Relations
- Positioning: Differentiating Strategies to Compete in the Global Marketplace

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