Ideas & Insights

The Unexpected Benefits of Outsourcing

While outsourcing is often thought of purely as a cost-cutting measure, organizations are finding a variety unexpected strategic and operational benefits as well.

Today’s corporate leadership faces significant challenges and opportunities in a quickly evolving economic environment and increasingly complex business functions. Worldwide, financial organizations are feeling the impact of higher volatility, uncertainty, changing regulatory environments, and a socio-political climate with pressure for predictable bottom-lines. Charged with the stewardship of the enterprise, CFOs in particular, are expected to create sustainable growth strategies, bring about value and an appropriate return on assets, ensure effective risk management, and more. The finance function faces data proliferation, complex commercial and operating decisions, to find and implement breakthrough technologies, improved people practices, and the adoption of innovative and transformative thinking.

As we try to work smarter, showcase great practices, and be the best example of finance leadership, it’s important to utilize all resources available. While outsourcing is often thought of purely as a cost-cutting measure, organizations are finding a variety unexpected strategic and operational benefits as well. In looking for a framework to improve processes and ensure financial stability, outsourcing offers a compelling approach to drive significant, meaningful solutions.

Scale & Efficiency:

As a critical member of leadership, you can increase your own efficiency by eliminating time spent to manage staff. You should be able to focus on business functions without conflicting priorities, which can lead to lost business.

Operations will not only be more efficient but will cost less. When you have part-time tasks, an outsourced staff will eliminate lost productivity costs. You won’t need to schedule regular hours for staff, whether the work is there or not, and you’ll save on employee benefits costs as well as office space. When the workload grows to full-time, an outsourced staff provides the ability for fractional increases in staffing and systems. There is also a significant time savings when you forgo written company policies, training manuals and time spent molding an accounting staff.

Strategic & Competitive Advantage:

Having a highly skilled staff with a wide range of experience is at your fingertips when you outsource properly. You gain access to experts with a field of experience related directly to the needs of your organization with the right level of understanding for your specific projects and tasks, not only now, but as your needs evolve. As well as being experienced, an outsourced staff is oriented to deliverables and deadlines. They work with a service mentality.

There is no need to make hefty investments in technology internally and along with outsourced staff comes access to proven, reliable accounting systems, configured to your industry and customized to your business. Data is managed securely and at off-site servers. You don’t need to worry about stable connectivity or additional IT support, plus nightly back-ups and a disaster recovery plan are often part of the package.

Control & Stability:

When this work is outsourced properly, you no longer need to worry about theft and separation of duties. There is no need to periodically rotate staff and conduct outside reviews or audits. Cash handling and bookkeeping, manager approved write-offs and adjustments, purchasing and credit functions are all separated, bringing confidence to your business functions. You’ll have better accountability and control of company assets.

Ultimately when you outsource finance and accounting functions, you are hiring a company, not a person, which limits risk, avoids the problem of turnover, and provides back-up for many positions. It also gives you access to senior finance professionals who will understand performance, budgeting, cash flow tools, and give advice. You’ll enjoy lower stress, be better able to manage risk, and can enjoy confidence that you will pass audits. Outsourcing your finance and accounting functions means bringing on a partner that will protect your business interests. An outsourced partner can clear obstacles that might otherwise divert time and attention away from strategic objectives and growth initiatives.

There are companies that outsource across the functional landscape and end up with sloppy work produced in remote geographies by unqualified personnel. Outsource intelligently and you’ll balance risk and reward while evaluating what work will be outsourced and what will remain in-house. The scope of services that should be outsourced can vary considerably, but almost any combination will provide significant relief in time and cost savings while delivering measurable value and process improvement.

Many CFOs have already eliminated, consolidated, and standardized many processes and operations. They continue to face expectations for lower cost and higher performance while setting an example in their own operations. Better control, improved efficiency, time and money savings, effortless accountability, and access to critical insight and expertise – all benefits of outsourcing. Outsourcing allows the CFO to act more strategically and make decisions that will support the overall organization rather than a single business function. Overall, the economy has improved, and we are seeing a rise in revenue in human resources, finance, accounting, customer relations management and insurance sectors. Ongoing pressure to optimize business performance has prompted leading CFOs to look for new approaches and solutions.

Monetizing Digital Content

As the information age makes content the leading online commodity, more and more organizations are trying to monetize their content. Consumers expect instant access to any and all content, across devices. Increasingly, the creation, conversion, and management of the digital content space and created new industries, business dynamics, competitive paradigms, and new demands on technology. The demand for the convenient availability of media, entertainment, news, corporate, social, and personal content has irreversibly shaped how companies and consumers create, display, view, and consume content. Responsive innovations digitize content, but to monetize this digital content organizations must act strategically to enable diverse distribution and maintain control. Media companies need to deploy scalable, integrated, and synergistic content through operational and customer management technologies to gain a meaningful advantage in managing their digital media assets and meet the needs of their customer audience.

When considering which content is monetizable, there are four types of content consumers are reliably willing to pay for.

  • If the content supports a job or career, such as Linkedin and Business Insider.
  • If it helps amateurs to seriously invest in their hobbies, especially if those hobbies have significant mainstream attention and competitiveness, such as photography, music, cooking, engineering, crafting.
  • If significant entertainment will be made available such as games, music, and film.
  • If it brings value to the user experience such as tablets making books, news, and other media available by mobile rather than relying on print.

There are many content business models available in several combinations, but the following, while conceptually distinct are not mutually exclusive and can be complimentary when designing consumer access and choice over access options. These are also currently the most successful models used to meet the needs of consumers looking for entertainment.

The Free-mium model is one of the most commonly used to monetize digital content. Digital content is made available for free and is ad-supported with the choice to upgrade to premium content services. Named for the combo of free and premium content, examples of free-mium content include LinkedIn, many gaming communities, Dropbox, and Hulu. This model is where you see VIP, pro, and business accounts. In this model, there are two distinct revenue streams (ads and membership) as well as the option for a third. A popular revenue add-on is content upgrades. Free-mium encourages ongoing and high-level site traffic because of the free content availability as long as ads don’t alienate consumers. Consumers have the satisfaction of choice by being able to add additional value if desired.

The Pay Wall/Subscription model makes all content available, but only to subscribers who pay monthly, quarterly, or annually. Pay walls are a simple model to implement that resonates with many consumers. While it will decrease traffic slightly because it works with a smaller segment of consumers, it can be highly successful. PayWalls are best implemented with established companies that have a great deal to offer, and that already have a great reputation in the marketplace. If there is an established brand, trust, and recognition of quality, consumers will be more likely to pay upfront. Just a few examples include news sites, such as the New York Times, many wedding planning sites that know consumer membership is temporary and need to capitalize on visitation early on in the relationship, and some professional education and management training sites such as Skillsoft and Lynda.com.

Using a Microtransactions model is essentially a bundled distribution model. Information and timeless content are available in a modular format that is easy to sell and resell. Consumers can sometimes feel like they are dealing with a fee service rather than a content provider so knowing your audience to develop desirable content, as well as designing proper packaging and marketing are important. This is a classic model employed by virtual gaming giants, but it is also employed by many online education providers where customers get a set of basic and complementary courses for one price. These can include entertainment such as iTunes, Netflix, and app purchases for phones and tablets. Ultimately, inertia is the key to mobilizing higher revenue. Managing user momentum to funnel them through the purchase decision takes a great deal of savvy but is highly rewarding. The biggest downside is consumers are being forced to make multiple purchase decisions, often limiting momentum and extraction if price points and value are not properly communicated or strategized. Additionally, average revenue per customer will have a cap when this model is used across communities. Customers will pay to work at the same average level as their peers, even if they might typically be willing to pay more when not influenced by the limited achievements of other users.

In an Incremental Paid Content Service Model, new content experiences are sold separately from a primary core content product. This formula gives consumers the option to pay for additional value as wanted or needed, but it is important to recognize that revenue will also be incremental. Also, new products or product evolution will be important, but can cause an increase in costs. One example is the use of this model across many online learning platforms.  Users, or students, pay for a basic course then pay again for more advanced courses and ultimately pay again for tools and resources that will enhance the experience, such as access to additional books, videos, and articles. Paid add-ons may also include access to tutors, practice tests, and access to online forums or like-minded communities. This is also common in the sales, self-help, and media industries where ongoing lead development, personal coaching, and movie bonus content is made available for varied fees.

In the digital media content industry, the return on investment in solution deployment and comprehensive business models has been consistently proven to be a worthy and necessary investment. Examining digital content management workflow includes the ability to deliver media assets for consumption across platforms. There are many options media companies may integrate to manage content, enable consistent and streamlined distribution, and utilize resources to optimize monetization. These models provide a starting place for building and maintaining a strategic and competitive advantage.

CONTENT DEVELOPMENT SUMMARY

Digital Media: Content Monetization

CONTENT TYPE:

Web Article

TOPIC:

Strategies for Monetizing Digital Content

AUDIENCE:

Media and Entertainment executives and entrepreneurs

ESTIMATED LENGTH:

800 -1200 words

PURPOSE/OVERVIEW:

Provide the reader with the following info:

  • Financial models associated with digital content (movies, music, books, podcasts, videos, etc.) are rapidly evolving. Media professionals must look for new ways to monetize content.
  • Summary of suggested principles / strategies from articles below

POSSIBLE TITLES:

Something like…

  • Three Strategies for Funding Digital Content
  • Five Factors Driving Profit in Digital Media

SOURCES | SIMILAR EXAMPLES

http://thenextweb.com/entrepreneur/2015/03/09/the-new-rules-of-content-monetization/

http://auditedmedia.com/news/interviews-and-case-studies/white-papers/digital-insights-maximum-monetization/