Outsourcing your marketing database to a third party removes control from the sales and marketing department, and distances the entire organisation from its prospect and customer data. It is expensive, subject to security risks and if the decision is made to migrate the database back in-house then the IT department is faced with the upheaval of incompatible technologies that result in costly and time consuming re-engineering work.
So, if we are to give credence to these concerns, why is outsourcing the design, build, hosting and maintenance of the marketing database becoming the preferred option? And why do only a small minority ever migrate in-house?
Your Marketing Bank Account
Outsourcing your marketing database is the equivalent of having a bank account for your data. Banks keep our money safe (well with the odd exception), we have easy access to it, and they provide us with additional services to help us manage and grow our investments. Few of us would ever consider hiding our life savings under the mattress, the same should be true of your marketing database.
However, it is reassuring to know that you can walk into the office and see a grey box that holds your database, and one of the main arguments I hear against outsourcing is that it distances the marketer from the data. In fact you need only stroll around any of the increasing number of direct marketing shows to discover that there is an array of campaign management tools on the market to provide unparalleled access, control, visualisation and reporting of your data. These tools make it as simple as making a withdrawal from an ATM, requesting a statement or paying a bill online.
So is an outsourced database more secure than in-house? In truth it is dependent on your supplier. A specialist in marketing data will be registered and bound by the Data Protection Act, and will be responsible as a Data Processor, whilst you remain bound by the act as the Data Controller. In addition, your supplier will have created a secure, locked environment (a data vault if you like) where everything will be fully backed-up, monitored and held on technology compatible with your own technology infrastructure.
Opening a Marketing Bank Account Must Surely Be Expensive?
This is where the banking analogy breaks down a little, as banks tend to provide accounts free of charge. But it is not necessarily as expensive as you may think. Management buy-in needs to be won from the outset, and there are a number of proof-points to assist you.
Outsourcing service costs are classed as fees (including leasing the software, professional expertise and services). It is not a capital investment. Therefore it is an attractive and acceptable proposition to the board, rather than one lump sum investment. Migration in-house is a key issue that I will cover later, however, I will say now that including a clause in the invitation to tender, to migrate the database in-house, can also help with management buy-in.
Whether it is fees or capital investment, controlling the budget is vital and a thoroughly documented process of each and every step of the project should be outlined. These steps, which cover the fine details of the entire project, from initial system specification through to final delivery and training, are your guarantee that the work will be completed on time, to specification and within budget.
Moving Your Investment -- Migrating the marketing database in-house
Some view outsourcing an ideal long-term solution. Others see it as a pilot to be proven before it is migrated in-house. There is a trend nowadays to anticipate migration (It is a clause in every tender I have been involved with over the past few years, without exception). But only the small minority ever exercises this option. I can think of only one in recent years, and a handful over the past 30 years that Identex has been providing outsourced services.
Those of us working as solution providers can be guilty of viewing migration as the loss of a profitable client, and so discourage this course of action. In truth it is simply part of the client lifecycle. Solution providers should be looking to help companies eventually migrate their systems in-house if that is their long-term goal. Quite often, the reason for not migrating in-house is a knowledge or resources gap (which is more common), cultural issues or simply the old adage that "If it ain't broke don't try to fix it".
You don't need to hide your data under the mattress, although be wary, you will find a lot of IT vendors more than willing to step up to the task but very few will be marketing data experts. An organisation that is proven, has demonstrable expertise and is cost-effective, is what you should be ideally looking for.
When you have committed to outsourcing your marketing database, and are selecting a solution provider, you could do far worse than judging them as you judge your bank.
Some of the questions you need to as include how quickly will it be set up? How much access will you have to the account and customer service team? Do you know where it will be held? If or when you want to move how easy will it be? What assistance/training will they provide and are there any hidden charges?
Whether you have a centralised in-house marketing database, disparate data files stretched across a number or divisions, or are starting from scratch, the right supplier will work alongside you to maximise the effectiveness of, and enhance access to your customer information.