Playing with fire

This has certainly been the case for Paul Blundell, the managing director of Optima Diagnostics, which specialises in online health and safety management. The business was set up in 2000 and after a couple of years it needed to gear up its sales. Blundell says: ‘As an organisation, at that time, you probably don’t have people with professional sales capabilities, so we were faced with the problem of which route to go down. Do we go out and try and recruit people? Without any background knowledge in that area, we felt a high level of risk going on that route.’ Back then, the size of the company was four people. Blundell found the answer to the dilemma lay with a company offering outsourced sales. ‘It soon proved to be the right decision and we saw significant lead activity and generation taking place,’ he says. Optima Diagnostics has grown to 12 employees and now has an in-house account manager for sales. Blundell comments: ‘The one thing you have to manage when outsourcing is the relationship. On the sales side, make sure there is proper alignment and goal congruence so the people are working within your targets.’

Less is more
As for giving away too much intelligence about the company and relinquishing control of core parts of the business, Blundell remarks that the outsourced sales team is given enough information to generate new leads but never to close a deal. He says: ‘From a sales perspective, there has to be enough information at their disposal to ensure they can do the job effectively, but we haven’t had to reveal significant amounts of confidential information. We provide general ballpark figures for them but we finalise everything ourselves. There is a point in the sales process when it comes back to us.’

When signing a contract with an outsourcer, Blundell recommends that you keep it only three to six months long. This allows time to review how the relationship is working out.
However, Gary Woodward, CEO of IT services company Pasporte, notes that for a larger organisation it is perhaps more usual to agree contracts which are ‘typically three years and upwards from that’. Deloitte’s Moller points out that a business needs to consider carefully how it will develop – anticipating various scenarios like Forde now does at net:telecom – to avoid penalties for deviating from an agreement. He warns: ‘The outsourcers have gone through contract negotiations many times before. They know the small print. You can bet the outsource provider isn’t going to lose money on a change of order.’

Although it may be tough to negotiate, a degree of flexibility is required. ‘It would be a brave company that knew exactly how they were going to grow and develop over the next few years,’ says Woodward. Like Forde, Blundell has had a bad experience, in this instance when outsourcing a finance process, but he too remains upbeat about streamlining operations: ‘I wouldn’t say it is the complete solution for everybody all of the time. What I would say is that, for a particular stage in the evolution of a business, I think it makes a lot of sense. ‘If you do your homework and find someone who is good at it, then you have as much chance of them doing it well as you have of doing it internally yourself.’

Woodward believes it would’ve been impossible for the company to have grown like it has without using other organisations. ‘What we actually offer our clients is very broad and there is no way we could have got all of those in-house skills in place from the beginning,’ he says.

Previous page

Next page