April 2006   
In This Issue:
        Stage 4 Solutions In Action
Stage 4 Solutions in Action

Marketing Outsourcing in the High Technology Industry: Insights and Trends

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2006 is off to a great start!
We have expanded our team to meet the growing demand for our services as our base of clients has increased. Stage 4 Solutions was recently invited to present at the Silicon Valley Product Management Association (SVPMA) to a sold out crowd! The topic of the presentation was "Strategy on a Shoe String: Stage 4 Solutions' 5-step Strategy Development Process". Click here to request a copy of the presentation.

This week, we are releasing our report titled "Marketing Outsourcing in the High Technology Industry: Insights & Trends". The study was based on detailed surveys and interviews with executives from a wide range of high technology companies. The report, summarized below, presents key insights and valuable benchmarking data for marketing executives. A complimentary copy of the report is available to Stage 4 Solutions' clients, and is available for purchase by other organizations. Click here to obtain or order the full report.

If you know of high technology marketing executives who could benefit from our services, please let us know. We would very much appreciate the referral.

Niti Agrawal
Founder & Principal
Stage 4 Solutions, Inc.
       Marketing Outsourcing Research
Marketing Outsourcing in the High Technology Industry: Insights and Trends
The outsourcing trend in the high technology industry is here to stay. Beginning with basic manufacturing and evolving to software development and support - employing outsourced services is now a part of virtually every high technology company's overall strategy.

But what of outsourcing marketing activities? The business press is largely silent on this question. To answer this question, Stage 4 Solutions conducted a study to raise awareness of this outsourcing area and to provide insights and guidance to US based marketing executives. We wanted to highlight the areas of opportunities and success criteria for effective marketing outsourcing.

Outsourcing accounts for a significant fraction of marketing expenditures at high technology companies. In 2005, of the 13% of revenues allocated to marketing activities, 29% was disbursed to outsourced marketing partners. Investments in outsourcing are expected to increase to 33% of annual marketing budgets in 2006. Marketing executives are predicting and driving this increase in outsourcing because of the real benefits realized through this business strategy. Marketing activities that are outsourced most often include: PR, advertising, website development, marketing program management, market research and sales tool development.

Currently, the majority of outsourcing relationships are with US based contractors, advertising/marketing agencies and PR firms. These partners are employed primarily to gain additional marketing bandwidth and to access expertise that does not exist internally. Cost savings and international partners are not significant drivers behind marketing outsourcing decisions - unlike the decisions to outsource activities in other functional areas.

While outsourcing is clearly a trend for marketing organizations, some high technology companies are not employing marketing outsourcing to optimal levels. Their concerns around selecting the right partners, and management and communication processes are resulting in lost opportunities for increased marketing traction. Such companies can leverage the study to identify the right marketing activities to outsource, create robust partner selection methodologies, and leverage best practices for partner management.

While outsourcing is critical to the execution of many marketing activities, the outsourcing decision is not made, or viewed, strategically. It is, instead, often viewed as a short term solution to a specific problem. Companies need to transition from this ad hoc, tactical approach to a strategically driven methodology where marketing outsourcing plans are tied to annual planning activities.

In defining outsourcing plans, marketing organizations first need to assess their core competencies and internal resource levels. Overall marketing needs both from an expertise and bandwidth perspective must be identified. Then, a gap analysis will identify the missing capabilities. For these areas, traditional "make" versus "buy" discussions will yield the areas where marketing partners should be engaged. This approach will result in outsourcing with the right partners at the right time and maximizing the value to the organization.

A full copy of the report will provide marketing organizations insights, guidance, and benchmarking tools to increase the benefits realized from marketing outsourcing efforts. A complimentary copy of the report is available to Stage 4 Solutions’ clients, and is available for purchase by other organizations. Click here to obtain or order the full report.