Volume 1 — Fall
this Issue: Snapshots
in Outsourcing —
Outsourcing Study Update — Consolidation
yourself to the party." Karen Rogers, Baltimore
Gas & Electric, Speaking at the ITVA Management Masters
Seminar on the future of corporate media management.
When the insource/outsource study
was designed in early 1996, it was not easy to identify many
commercial production companies that were making formal
out-sourcing overtures to corporate clients. That picture is
beginning to change as more and more large contract producers
(as Tom Hope defines them) are finding some real growth
opportunities as outsource providers.
Curtis, Inc. of Cincinnati, known
primarily as a tape duplicator has taken over media operations
for a local GE division and has made outsource proposals to at
least one other large company we know of (outside of Ohio).
In Columbus, Mills/James
Productions has taken over the operations at a local hospital
and is actively seeking more clients.
That's not to say this phenomenon
is restricted to Ohio, only that these are two cases we can
Outsourcing of entire production
functions is only part of the picture. Since the new IRS
guidelines on subcontractors were issued in 1994, more and more
companies are turning to Contract Labor Providers or personnel
agencies to handle free-lance staffing needs.
Gogolak Communications Group in
Milwaukee and Crewstar of Boston are two companies that come to
mind. More than just paymasters or temporary employment
agencies, they also actively select and manage the part time and
full time free-lance professional staff for their client
We're working on a couple of more
detailed outsourcing stories to appear in future issues.
Our landmark benchmarking study
Communications Media Management-Insource or Outsource, Making
the Right Choice, was honored with the Distinguished Achievement
Award at the Communications Media Management Association (CMMA)
Professional Development Conference in Pittsburgh this past May.
As we reported at that time,
outsourcing continues to be a key strategy for a growing number
of corporations. However, the media departments and production
companies benchmarked in the study remain at the "head of
the class." Their best practices, which are the key
findings of this study, set standards to strive for.
Procter & Gamble, as example,
has added several people to their Photo/Graphics staff so far
this year and will soon be adding more. In addition they are
planning to move to a new, multi-million dollar facility.
Convergent Media Systems has
added BMW's distance learning network to their roster of clients
for turnkey production and management outsourcing services.
While outsourcing is of concern
to many media managers, implementing best practices can leverage
the value of outsourcing, lead to effective cosourcing or
reinforce insourcing. However, mergers and acquisitions often
result in reorganizations over which a manager can have little
control. Consolidation or elimination of media production groups
often follows, along with a shakeout of services and staff.
Pacific Telephone (PacTel) is a
pioneer in video production and distance learning. Their San
Ramon and San Francisco studios serve over 70 BTV receive sites.
An independent communications audit earlier this year gave
television and the network very high marks.
When Pacific Telesis was acquired
by SBC (formerly Southwestern Bell) on April 1, 1997, SBC said
they intended for PacTel to operate independently.
Perhaps demands for ROI and
increased shareowner value were overwhelming, however, for on
May 1, SBC directed PacTel's Corporate TV department to shut
down operations immediately. After some discussion the shutdown
was postponed until after a key July 2 broadcast. The staff was
allowed to apply for any remaining jobs. Management of the BTV
and videoconferencing networks may be moved to St. Louis.
SBC shut down its own internal
video facility several years ago and now outsources virtually
all media production. Apparently they have no BTV network
similar to the one operated by PacTel.
Additional fallout from the
merger was cancellation of all of PacTel's interactive cable TV