Print Procurement Outsourcing is it all it is cracked up to be?

There are companies that will tell you that print is not your core competency so why are you spending money to procure print when you will save money outsourcing that function. Well with that mentality why just stop at print why not outsource ALL of your procurement? What these companies are telling you is that they know how to spend your money better than you do so let them spend it for you. I want you to know that these companies are feeding you a great line. Never the less, a line. You may even hear that outsourcing is the trend. But for every company that you can name that is moving to outsourcing I can name a company that is pulling sourcing back in house. I talked to another company today in the wireless industry that has just terminated an outsource contract and is pulling print procurement back in-house. Why? because the promises of saving big dollars are unfulfilled promises. The key to sourcing either out or in, is about process, efficiencies, and compliance. The reason these companies think they can do better is because they have focused on the process to improve the efficiencies. It is about working smarter not harder! In some cases it is about paying substandard wages to inexperienced buyers and giving them a tool to do the job of two experienced buyers. Their training consists of take the request, enter the data, and the machine will spit out three prices, give the customer the lowest price, don't worry about who is printing the job or the quality just send the job to them when you get the approval. Heck if all your looking for is bottom line price on every job Hire Me! I will even give you a guarantee that I WILL save you money don't ask about the quality and don't ask about delivery. Let's talk about a Pyramid commonly used in business and let's put a twist to it.
Let's call it the outsource triangle:

Now the game is you pick one and I get to pick two...Oh you want to pick two OK pick two...I pick one! Either way this is a losing proposition, You pick Price and Delivery, that means I get to choose Quality. Oh you want Quality and Delivery, That's fine...I get Price and you will pay for it. You want ALL THREE? Sorry it doesn't work that way in outsourcing! It doesn't work that way with in-sourcing either the difference is YOU KNOW what you are getting, how much it will cost to get, when you want it, and the way you want it. The difference is in-sourcing YOU make the decision, and it has to be a conscious one. Business owners and CEO's are entrepreneur's, they are constantly thinking about and making decisions that will impact their bottom line. And, if they make poor decisions their business will fail. I challenge you as a print buyer or print director to think like an entrepreneur, think about that buy decision as if YOU owned the company. Is the decision I am making the best decision I can make for my company? Will I get a paycheck at the end of the week if I go with company A over company B because I like the sales rep? Yeah, his price is higher but at lunch yesterday he told me how his kid needs braces and poor Junior may not be popular without straight teeth. Stop worrying about their business, worry about yours! They won't care when your CEO comes in and tells all of you that they are moving to an outsource company and that you will have to apply for a job with them or go do a job in the mail room that you left 15 years ago when you were an intern and oh yeah that comes with a pay cut! Is that Sales Rep going to be knocking on your door offering to share his commission check with you? You'll be lucky if you can get him to answer your voice mails. If you treat your job like your an owner of the company and make decisions like a responsible owner would I think you would find that your job will be just fine and your boss will even be able to give you a raise because they will see the value you can bring to the company.

OK, now some outsourcing company is going to tell you; YOU CAN HAVE ALL THREE! Well what they are doing is not rocket science and they are thinking like a business owner that needs to make good business decisions. They will balance the triangle on one of it's points and they will make trade offs where they can. Some jobs will come in with poor quality, but not enough that will make you complain. Some jobs will come in higher priced than you expected but not enough to make you complain. Other jobs will come in late delivery, but not enough that you complain. Seeing the pattern? Most outsourcing companies can be successful because they have put process efficiencies in place such as sourcing and vendor management systems that reduce the time to production, they also have vendor agreements that they fall back on that they guarantee certain volumes of print to certain suppliers in exchange for "Rebates" or some like to call these kickback's (but that's such a dirty word).

The best recommendation I can give any company is take a long hard look at your vendor base.
Who are you doing business with?
Are there companies that can do more of the jobs thereby eliminating a vendor or two?
If I offer them a guarantee of work can I get better pricing?
Can I get "Rebates"?

The right suppliers are willing to give rebates or even price reductions because they now know where their next job is going to come from and they know that you are guaranteeing work to them so that now they are going to be able to make payroll. See, they are in the same boat as you and they know you need to spend money and they need to spend money as well, it's just nicer knowing up front how much you are going to make in the next year before you need to budget.

The biggest thing to remember as a company is that either way you are paying money, so why do you want to pay an outsource provider to do exactly what you can do and probably cheaper than the outsource provider? If the outsource provider wasn't making money do you really think they would offer a service like this? You can do this yourself it is not that hard if you have the print buyers in place now you really need to pay attention to the process and how to make the print buyer more efficient. Give them the tools to do what an outsource provider does and you will make them more efficient.