Outsourcing

Outsourcing is simply contracting out for non-strategic services, those tasks that aren't part of a company's core business (or expertise).
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The headline read, “When specialists do it better and for less.” The article focused on the issue of using outside vendors to perform tasks that formerly were handled by a company's own staff. It's called outsourcing. The result is often lower expenses, and the ability for employees to better focus on those tasks that are unique to the business. After reading the article, I began to wonder if this applied to broadcasting.

Outsourcing is simply contracting out for non-strategic services, those tasks that aren't part of a company's core business (or expertise). For instance, most stations hire a janitorial service for cleaning duties. Certainly cleaning the restrooms and emptying the trash are important, but they have little to do with getting the news on air.

Another example might be IT systems and phone maintenance. While your best engineers may be able to repair an extremely complex camera or production switcher, can you afford to have them decipher and fix the phone system when it fails? Payroll is typically one of the first tasks to be outsourced. Why? Because it requires special skills that have nothing to do with broadcasting, and there is no room for error. Today, outsourcing for such duties is typical and considered standard practice.

As managers look for even more cost savings, could other non-strategic duties be outsourced? Consider this. Does a station really need a transmitter engineer? Today's transmitters are highly reliable, which is great. Unfortunately, the downside to this advantage is that when they do fail, the engineer may have little experience in fixing it. There are advertisers in this magazine that can provide round-the-clock monitoring and maintenance of a TV transmitter. Their engineers probably know the transmitter better than a staff employee could. They have direct access to parts and were most certainly trained by the factory. While it's traditional to own and maintain a station's transmitter, where's the advantage in ownership of this particular task?

Could other traditional tasks be outsourced? One duty that is increasingly being looked at for outsourcing is network on-air playout. While this model may not work for local stations, consider a large network or satellite-delivered service. Think about the capital costs required to not only build one on-air playout center, but also construct a full emergency backup facility to keep the network on the air. How much less expensive might it be to contract with a vendor that's equipped to handle network distribution and can amortize their capital costs across several clients? This model is already working well in Europe.

How about your cable system's local weather channel? Local weather channels aren't “local” anymore. They're originated by a couple of vendors who distribute via satellite, and viewers never know the difference. Again, calculate the cost of providing a 24-hour local weather channel, complete with meteorologist? Few cable systems could provide the service — let alone make money on the investment.

As new IT and network technology allows many tasks to be handled hundreds if not thousands of miles away, new solutions for old ways will be developed. Station staff might not easily accept some of these ideas. However, business issues ultimately will drive the decisions made.

Today, the broadcaster's tradition of self-sufficiency may simply be too expensive an option.

Send comments to:editor@primediabusiness.comwww.broadcastengineering.com

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