- Feb 5, 2020
- John Ahya
Refocusing on the Core Competencies
Constant supervision and extensive application of core competencies required in the management of the digital agency has transformed outsourcing services from an option to a necessity. It is no longer a question of ‘why we should outsource?’ but ‘when and what should we outsource?’
The Premise of White Labeling
Outsourcing white-labeled projects refer to using third parties to undertake your clients’ project and deliver the project to your client under your brand name. For instance, your white label agency is awarded a web-design project by a client but, due to competency issues or work backlog, you decide to outsource the services of a digital agency to complete the project. Upon completion, the outsourced digital agency, a third-party in the project, delivers the project to your agency where it is branded as your product and delivered to the client.
Clients’ decision to seek the services of your agency is driven by brand recognition or specific attributes of your brand, such as quality, cost benefits, timely delivery, and so on. This implies that the agency leverages the brand and the positive attributes attached to their brand to get projects from clients. Building a widely recognized and highly respected brand takes time, resources, and consistent focus on core competencies. On the other hand, the decision on which agency to outsource the project should be based on your assessment of the current strengths and the weaknesses of your agency to identify the critical skills required to optimize performance. Based on this analysis, the process of outsourcing white-labeled projects can be broken down into two critical phases; brand-building phase and partnership-assessment phase. Focusing on the core competencies is critical in both phases.
At the brand-building phase, your agency lacks the manpower and resources to build a widely recognized and highly respected brand. This creates a situation where you have to juggle between exhausting the scarce resources to deliver a few quality products and risk going under or preserve the scarce resources but deliver low-quality products and risk losing the few clients and go under. The fact that both options threaten the very existence of your agency highlights the need for a third alternative. This is where outsourcing the services of a highly skilled and experienced white label agency comes in.
Outsourcing offers numerous advantages for digital agencies in the brand-building phase. Firstly, it is more cost-effective than hiring an in-house team, which is very important to your agency at this cash-strapped phase. Secondly, outsourcing provides the opportunity to expand and diversify services that your digital agency offers. For example, if your digital agency offers e-commerce website development services, partnership with a white label agency with expertise in SEO will enable your digital agency to gain additional revenue by offering SEO services, even though you lack the competency needed to complete SEO projects.
In the current highly competitive business environment, service providers are no longer external entities detached from organizations but are increasingly becoming partners with a vested interest in organizations’ performance and accountability. Identifying the most suitable partner requires a clear focus in the assessment of core competencies of your agency and the service provider, to identify outsourcing agency to meet the needs of the organization. It should seek the answer to the question, ‘How much will it cost to acquire the core competencies needed to improve performance to the desired level?’
It is undeniable that agencies, just like any other business, cannot acquire or possess the expertise needed tocomplete all project requests by clients. For example, if your digital agency primarily offers branding PR, your digital agency may lack the capacity, flexibility, manpower, resources, or expertise needed to execute technical and intensive projects such as e-commerce website development or web design. Despite the lack of expertise, some projects can include two or more tasks awarded as a package. For instance, a new company requests your digital agency to design their website and e-commerce platform and undertake SEO and branding PR, which are all awarded as one project. Declining one task due to lack of expertise will force the company to seek the services of another agency that can deliver the four tasks under the project. In this situation, your agency can harness the flexibility offered by outsourcing but, you must begin by choosing the tasks that you will undertake and the ones that you who should outsource to a third-party based on the assessment of your strengths and weaknesses.
Effective assessment will enable your agency to deliver all tasks under the project by concentrating on areas of expertise and outsource the tasks in areas of weakness. For example, if you are competent in SEO and branding PR but incompetent in web design and development of e-commerce website, your agency undertakes SEO and branding PR and give web-design and e-commerce development to another digital agency with expertise. This is the basic definition of refocusing on the core competencies.
White labeling offers numerous benefits to agencies at the partnership-assessment phase. Itenables your agency to offer full-service despite a lack of expertise, resources, and manpower to offer all the services in-house. Subsequently, offering full-service solutions will increase your revenue and the number of clients seeking to work with you. Also, it is cost-efficient compared to investing in an in-house team to execute multi-service projects.
What to Assess in a Potential White Label Partner?
- Experience, resources, expertise, capacity, and, most importantly, competency. Some can have the experience and the resources but are incompetent.
- Take your potential partners’ track record and reputation into consideration. This can be easily attained by exploiting your contacts in other web agencies to acquire information about your partners’ work ethic, such as delivery time, financial issues, product or service quality, and so on.
- It is important to note that the client should never know that their project was executed by a third-agency. This means issues of trust, confidentiality, and anonymity should also be taken into consideration when assessing potential partners.
- Ensure to assess whether they agree to the terms of your white labeling contract. The mutual agreement should be indemnified to shield your agency from legal issues in the future.
- Your agreement MUST include provisions for free product revisions and improvements based on pre-agreed guidelines.
- It is also important to assess your partners’ availability. Even though cost and competency are vital in white label partnerships, the best white label agency to partner with in time-sensitive projects should always be available when you need them.
Executing your outsourcing and white labeling operations based on this approach will enable refocusing on the core competencies and set your digital agency on the path to success.