Throughout most of the 20^th century manufacturers worldwide regularly faced “make or buy” decisions. Some manufacturers considered it a badge of honor to make all their own components to ensure high levels of quality. I can recall visiting Tektronix back in the late 1960s as a magazine editor, and was somewhat surprised to learn that it manufactured everything that went into its oscilloscopes – right down to the knobs on the front panel.

Now fast forward to the 21^st century where “make or buy” decisions have given way to “when to outsource” options that encompass an increasing number of business operations including Marketing. Indeed, outsourcing has become commonplace because it has given birth to successful new business models. Perhaps one of the most noteworthy is the “fabless” business model within the semiconductor industry.

In the fabless model, the entire wafer fabrication process is outsourced to world class wafer foundries thus freeing the fabless chip company from the enormous cost and resources needed to build, operate, maintain, and keep fully utilized their own fabs. By the same token, fabless companies can focus their resources on design, innovation and building brand equity for differentiated products. Even AMD, whose illustrious founder Jerry Sanders once asserted, “Only real men have fabs,” is well along the path of adopting the fabless business model.

If a company fits any of the following descriptions, then it would be well advised to consider outsourcing the Marketing function:

• Start-up without anybody on staff to oversee marketing: Needs immediate expertise to help build and train marketing/sales team, and calibrate product development to meet real-world customer requirements.
• Company undergoing a major reorganization: Needs experienced help that can hit the ground running to maintain marketing momentum and help restructure and re-train the marketing/sales organization.
• Established enterprise reinventing itself: Needs timely and objective perspectives and strategic recommendations in targeting new market opportunities.

In outsourcing the Marketing function, we have found that the most effective approach is for a company to appoint the appropriately experienced person within the consultancy as ”Chief Marketing Officer” (CMO) reporting to the CEO, and communicating to all employees that this is an “acting” position that will ultimately be a staff position within a 1 to 2 year period. If there are any senior marketing people within the company, including those at the VP level, they would be considered as potential candidates.

Thus the stage is set to empower the outsourced CMO to move authoritatively and quickly to implement the programs needed to drive marketing success – as it also puts a big carrot on the stick for any senior marketing personnel interested in becoming the company’s CMO upon completion of the outsourcing period. Over the course of outsourcing its Marketing function to an experienced consultancy, a company should expect to see tangible results within the first three months of engagement.

Tags: Big-M Marketing, Outsourcing

This entry was posted on Monday, September 1st, 2008 at 9:47 am and is filed under Big-M Marketing, Business Models. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.