Palanivel Kuppusamy Palanivel founded Dexterity in 1999 to provide technology and analytics solutions for Information savvy businesses. Over the years, he built strategies that established the company as a leader in Marketing and Customer Informatics space. Read the full biography here.

Past and Future:

What has happened and is yet to happen on MRO Maturity

24th November, 2010

Although outsourcing and offshoring practices in business services like IT date back to 80’s, the Market Research industry took note of it as late as 2000, with a few exceptions of some Top 10 firms having captive/semi-captive setups in low cost destinations like India to keep their operations costs low. In spite of having a late start, the industry still went through a similar learning curve, challenges in communication and quality – a lot of which can be avoided or minimized at the least by just bringing some best practices from the other matured outsourcing practices (e.g. from IT outsourcing). After 10 years, studies on outsourcing maturity and satisfaction still show that only about 40% of the MR companies are happy about their outsourcing practices / results.

While the market did mature in the last 5 years, the level of maturity that it could achieve in the next 5 years can be significant, if we cross-breed some best practices from other outsourcing domains like IT. Be it moving towards more committed relationships (as opposed to totally ad hoc relations), or an onsite-offshore mix of resources (as opposed to complete offshore resources), or joint definition of SLAs and Quality checklists, there are ways to leap frog the maturity curve in the next 5 years. This article summarizes 5 key improvements in the last 5 years and 5 areas that needs to mature in the next 5 years.

Five good things that have happened so far:

Platform Standardization: Outsourcing is all about Scale and Standardization. In the recent years, more MR firms have standardized their research operations on leading Industry platforms as opposed to using home grown tools. Besides eliminating maintenance issues, standardization has helped companies to embrace outsourcing easily due to readily available skills in the market on standard industry platforms (like SPSS, Confirmit).

Vendor Maturity: From practically non-existent in the previous decade, MRO became a serious business opportunity that some pioneering companies, from India particularly, embraced. MRO at the same time matured various areas like skills acquisition, process management, quality control, shift patterns and delivery mechanisms to meet the client demands and challenges related to expertise, turnaround time and quality. The pioneers in MRO, such as Annik, Dexterity, exevo and Ugam, did a tremendous job in shaping this business opportunity.

Industry Acceptance: Industry leaders like Nielsen, Kantar and Synovate embraced outsourcing as a means to improve their operational efficiency and bottom line and a big list of MR and Panel companies followed suit. This silent change has been happening in a very large scale, taking MRO volumes to several hundred million dollars.

Ease of Market Reach: Market Research Industry bodies have played a great role in offering well defined channels for the MRO companies to reach out to their target audience. Strong bodies like ESOMAR, CASRO, IIR, MRA and their popular annual conferences provided the MRO companies an easy reach to their target audience. Not many industries the size of Market Research have such established and efficient industry bodies and channels.

Skills availability: It’s a no brainer that abundant availability of skilled resources at low costs in countries like India was certainly a key driver for the growth and maturity of MRO business. Although this is needs niche skills and some of the global MR practices aren’t common in India, basic skills in Statistics and English language were abundantly available and companies could invest in training programs to develop employable skills required for MRO.

Five things that need to happen:

Committed relationship: As in many other outsourcing relations, MRO would also benefit from a strong commitment from the client and obviously from the vendor. Many MR firms that complain about outsourcing or expressing their dissatisfaction can indeed change their experience if they work on an outsourcing roadmap that defines the commitments required from both parties. Veterans in outsourcing would agree that most challenges related to outsourcing can be solved when a committed / dedicated team is identified for a client and expectations + processes are set. Ad hoc engagements and using someone for overflow doesn’t really qualify as outsourcing, and will have challenges and problems that are not worth solving or even discussing.

Realistic expectations: The above takes us to the next key area – setting realistic expectations and meaningful SLAs. Borrowing this key learning from IT outsourcing, stakeholders need to invest time in reviewing internal efficiencies, processes, challenges and defining knowledge transfer and transitioning phases adequately.

Joint definition of QC/Processes: Sure, there are differences in processes and cultures among client organizations. While the outsourcing vendor can define the basic QC processes and checklists, these have to be carefully mapped and customized to a individual clients to be in sync with their internal systems and processes. Gaps in this often cause a series of delivery issues that is the cause for many of the horror stories on outsourcing. Once processes are replicated to the requirements, the rest of the delivery management becomes fairly simple.

Onsite-Offshore mix: For the same reason that client cultures vary, it is important that the vendor team is given an opportunity to understand the client work culture. Matured IT outsourcing relationships always have onsite presence as a key component. Although it slightly increases the cost, having a ratio of about 1:6 to 1:10 has a very minimal impact on the overall engagement cost, and the increase in cost is well justified by the improvement in communication, delivery quality and responsiveness.

Attracting and retaining talents: Right from leadership level to scripters, this industry needs to continuously attract and retain good talents. Treating them with respect and remunerating them adequately are among the areas that need attention. The financial services and IT services industries have done extremely well on this front. Placement statistics of IIM-A, the best B school in India, shows that, in comparison, consulting and financial careers attract twice as many people as marketing careers do. And only a part of the Marketing careers are in MR.

The worth of Michael Porter’s comparative advantage model has been proven beyond dispute with the rise of outsourcing / global sourcing in the last two decades in many mainstream activities of major businesses. Market research and consumer insights processes are no exception. The decade long maturity of the MRO industry and the resolve of the major MRO players will drive more process engineering, simplification, and development of processes / tools to accelerate value for their businesses and their clients.

Palanivel Kuppusamy

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