What a difference a decade makes

Mark Hannant  •  July 2021
  • Outsourcing

Eleven years ago, I began to pitch creative agencies the idea of outsourcing production work to India. Having run studios in London and New York, I could see how uneconomical it was to retain expensive teams of designers, layout artists, animators, and other specialists to do routine production tasks. Why not tap into a pool of talent in India at much lower costs? 

The initial response was tepid. Even when agency owners, CFOs, and MDs with P&L responsibility could see the cost benefit, there was resistance from production and creative directors who saw outsourcing as a dangerous loss of control, or perhaps a threat to their substantial power bases.

How times have changed. The sceptical responses I once received have been replaced by practical and detailed real-world questions. 

Agency clients and prospects are no longer asking whether to outsource production work to India but how we can collaborate to extend the scope of service to give them maximum advantage. How can India-based resources be more closely integrated into our production workflows? How can we get the most from the time difference? What else can we provide? What volumes can we handle? Are we GDPR compliant? 

Several factors have combined to trigger this shift in mindset. 

  1. Business models have changed. The way we think about capabilities has transformed – specifically what we ‘own’ and what we’ll ‘rent’. Software now comes as a service. Our upgrades to Adobe’s Creative Suite come via the cloud. The same shift is happening in the way companies, including creative agencies, think about talent. Access to skilled technicians at scale on a flexible, need-based model makes a lot of sense.
  2. Remote work has become mainstream. In the past year and a half, almost everyone has been working remotely. Suddenly, it doesn’t matter if the person with the skills you need is four miles or 4,000 miles away. This mindset shift opens up a whole new world of talent.
  3. Market conditions for many creative agencies remain tough. Brand managers are being asked to do more with less. Long-term retainers are giving way to more project-based work. Many agencies are trying to manage fixed costs in a variable cost world. That’s hard. Being able to deliver a wider range of services to clients without adding headcount is one way to remain competitive.
  4. Perceptions of India have changed. A decade ago, outsourcing to India meant call centres and low-value technical support. Since then, major investments have been made into emerging higher-value segments of the outsourcing market. In June 2021, Netflix announced that it will build its first (and only) live production facility in Mumbai. What better endorsement of a strategy we envisioned a decade ago! 

Increasingly, the agency executives I meet understand that to remain competitive and deliver results to clients and shareholders, they need to rethink their ecosystems. They need supply chains that allow them to scale up and down and deploy specialist resources at short notice and at competitive price points. By outsourcing production tasks, they can focus their efforts on higher value creative work while someone else takes care of the rest.

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