DialAmerica Develops ThinSourcing: A New Type of Services Vendor Relationship

In response to challenging marketplace needs and frustration with suppliers, teleservices firm DialAmerica has come up with a new type of organization/services vendor relationship which it has dubbed ‘ThinSourcing’.

 

ThinSourcing combines the handing off of services, such as customer care, and sales to vendors in traditional outsourcing with the tight client collaboration of insourcing, where separate in-house units provides discreet services to organizations, both at lower costs. With ThinSourcing, services firms (like DialAmerica) manage entire processes from end to end, not just answering or making acquisition or lead generation calls.

 

ThinSourcing is explained and documented with case examples in a new white paper entitled “ThinSourcing: A New Way for Businesses to Operate.”

 

The paper was commissioned by DialAmerica President and CEO Arthur Conway, who observed changes in how companies and their most trusted vendors were beginning to interoperate.

 

“ThinSourcing represents a powerful, growing solution for today’s marketplace,” says Conway. “Companies looking to lower costs, reduce capital investments, operate more efficiently, serve customers better and, ultimately, compete more aggressively should look to vendors who practice ThinSourcing.”

 

ThinSourcing provides cost-effective third party services and delivers those services in a manner that is virtually indistinguishable from the way the organizations themselves would provide them. With ThinSourcing there is, in effect, a very thin line between the vendors and clients.

 

The new method utilizes the best practices and the clear delineation between clients and suppliers with outsourcing but without the hidden expenses of integrating and managing outside vendors and the issues of reduced transparency, control and quality assurance. It utilizes the close business relationships with insourcing without the drawbacks including difficulty in hiring and retaining employees, maintaining specialized technology and staying abreast of new tools and techniques.

 

ThinSourcing partnerships are flexible. The programs can be managed at the vendors’ premises, or under their direct control (such as home agents), or at the clients’ offices and buildings.

 

DialAmerica drew ThinSourcing from a recent paper with the American Teleservices Association that surveyed 24 major U.S. companies that outsource over $300 million in customer acquisition and customer care functions. 

 

The research found that the top reason why these leading firms outsourced was to enable them to focus on their core business imperatives. Their top concern in assessing the value of outsourced customer care programs was customer satisfaction.

 

Over 90 percent of companies told researchers that it was important that outsourcers have business experience in their industry sectors, understand the rules and regulations of their industries, and have impeccable compliance records.

 

ThinSourcing is built upon five key pillars echoed in the research:

 

Custom business solutions. ThinSourcing relationships require custom solutions that precisely meet the needs of contracting companies. ‘ThinSourcer’ vendors act very much like management consultants: assessing needs and formulating detailed plans of action. Unlike consultants, however, ThinSourcers implement agreed plans in accordance with clearly defined service level agreements and performance metrics

 

Seamless, secure technology platforms. Seamless, secure technology is critical in successful ThinSourcing relationships. Flawless integration with clients’ IT systems enables ThinSourcers to operate indistinguishably from contracting companies both internally and externally

 

Advanced recruiting, training and retention programs. Hiring, training and retaining a high-performance workforce is perhaps the greatest challenges for ThinSourcers, who need to fully understand the demanding requirements of their own businesses, as well as those of their clients. Operating in strong labor markets and using well defined performance criteria, ThinSourcers must effectively hire, train and motivate highly skilled workforces

 

Comprehensive, timely, transparent reporting systems. Operating indistinguishably from clients means providing continually updated and fully transparent performance data and analytical information. This real-time reporting enables ThinSourcers and clients to accurately track progress, engage in an open exchange of ideas and rapidly adjust program implementation, if necessary, to achieve business objectives

 

An impeccable compliance process. Thinsourcers must fully understand all relevant laws and regulations that affect their clients’ companies and adopt operational practices that fully comply with these requirements. In many cases, ThinSourcers must track and adhere to multiple government regulations that cover their own business practices as well as those that govern their clients’ operations

 

Although ThinSourcing as a business approach has only recently been named and codified, DialAmerica reports that several progressive companies have already been operating in a manner that is consistent with its principles and practices. For example, UPS has moved well beyond package delivery and now runs entire supply chains for some of its clients. ADP has expanded beyond payroll processing and now manages other companies’ whole human resources functions.

 

DialAmerica developed a ThinSourcing subscription renewal program for Highlights, a leading children’s magazine publisher. Utilizing sophisticated data mining techniques, DialAmerica developed a customized solution and then hand-picked a team of experienced contact center agents to implement it. These agents received rigorous training regarding Highlights’ business objectives, brand messaging and customer sensitivity. DialAmerica also developed and continuously updated a detailed, electronic report to keep the client fully apprised of daily campaign results.

 

DialAmerica functions today as the fully integrated subscription renewal arm of Highlights. With continuous, year-round calling to more than 175,000 Highlights subscribers, DialAmerica has sold over 150,000 renewals to the publication’s customers over the past five years.

 

In studying the marketplace, Conway realized that DialAmerica, which his father founded 50 years ago, had never operated as a traditional outsourcer.  Instead, it functions in a manner that virtually eliminates the line between his company and its clients.

 

 These examples are quite different from the typical narrow outsourcing arrangements of yesterday,” explains Conway. “They clearly demonstrate that companies are willing to turn over core business responsibilities to outside vendors that operate with a highly integrated ThinSourcing model.”