A white label outsourcing partner is working on a web development project with a marketing agency. The agency’s end-client is in the commercial catering industry, providing kitchen gear and equipment through franchises and dealers in the Northeastern United States.
While the web-development project is in progress, the end client mentions that rental equipment gets transferred in and out of their storehouses constantly. Some renters clean it properly; some don’t. Some items get damaged; some do not. Some are returned to the right location, some to the wrong one.
It all starts to look alike to employees and they can’t keep track of it all.
The agency is healthy with visionaries who want to brainstorm about the problem and solve it. But they need an engine to actually produce the solution once they conceive it. So the outsource partner sits in on that project, too.
As widely staffed, far-ranging experts in any manner of digital specialization, the outsource is perfectly suited to not only create websites but to also create platforms. Systematize processes. Develop SaaS.
Intellectual Property: IP.
Now the employees at the catering company simply pop open the new app for kitchen rentals, scroll through an equipment rent-return checklist, take pictures, record a video, click on some radio buttons. Then it’s date- and time-stamped against that specific user’s IP address.
Everything is now documented and with the app that the outsource produced. Quickly accessible and cross-checkable. And that helps “encourage” renters to return the equipment in the proper way. Or, when they don’t, it helps the company easily recover the associated fees and costs.
More of What a Partner Can Be
A true partner in outsourcing will act just like that… as a partner with a vested interest in ongoing, mutual success for all parties. Not on-site at the marketing agency every minute, but part of the team. Either figuratively or literally “at the table”.
Listening to and comprehending the business challenges du jour, understanding the pain points and thinking about the tools that could solve them.
Outsource experts are constantly coming up with digital solutions for themselves (or they should be). For example, software tools that help them manage dozens and dozens of development projects across hundreds of teammates on multiple continents.
It can be mind boggling.
But the ingenuity and skill sets those white labels leverage for themselves can ultimately translate to opportunities for agency owners, too… IP development that leads to additional revenue streams.
Particularly for agencies that niche down and specialize because they tend to have very specific, often-repeated challenges to solve. Or maybe it’s an even more-specialized marketing agency that just does SEO… or content development… or an agency that just does talent casting.
The specializations are endless as are the opportunities to create specialized industry tools for them.
Then once that niche is solved for, it might also be conceivable to further develop and customize that type of SaaS for power-tool distributors that rent to the construction industry. Or to golf cart dealers that lease machines to resort owners.
The opportunity for new revenue streams is substantial.
What Does It Cost?
Outsource partners turn the fixed cost of full-time employees into a variable, pass-along cost that is transparent to clients. It optimizes an agency’s adjusted gross income by avoiding all of the salaries and benefits that would otherwise be overspent on an in-house development team. Outsourcing becomes a much broader core-flex staffing solution.
Core-flex is where absolutely essential personnel (visionaries and thought leaders, for example) comprise the core, the hub, of the agency staff. And then outsourced specialists are spokes radiating from there. Specialists who can be taken off the shelf and put back on as needed.
Ten different development specialists may need to touch an IP project. And as many as needed can be assigned, but none of them will have anything less than 100 percent utilization.
3 full-time equivalents = 1 full-time employee
It depends on the complexity of the project but three full-time equivalents, or FTEs, can easily work in the same budget space as one full-time employee.
From front end to back end… from SEO to QA. As sprints change, so does the line-up. An agency cannot do that with full-timers at anywhere near that white-label cost.
Long story short, outsourcing an IP project optimizes an agency’s adjusted gross income.
Documentation and IP Protection
Developing IP and then protecting it go hand-in-hand. Think of the new IP tool as one that solves a unique problem, is customized to an industry.
To put that in perspective, swapping photos back and forth with any and all clients through a generic server is certainly a digital process. And it has been systematized in a way. One could suggest it is a platform. But that’s really just today’s equivalent of sending a bicycle messenger back and forth from office to office.
It’s not IP.
Whereas, to develop a real IP tool in the first place, one needs “documentation”. And that is what also helps “validate” it as IP. An outsource partner is going to do that. Creating records and rationale and steps taken to enable the development… akin to a user’s manual for that tool.
Think of documentation like this… it’s a thing that defines the IP tool. For example, an agency visionary is picturing a field of butterflies and flowers. The outsource is the engine that’s going to make that happen. However, even though it’s a great vision, it has no detail. So the partner will ask… what type of field? What’s the weather like? Are you wearing a coat?
What color are the butterflies? Big butterflies or small ones? Are the butterflies flying or not?
The Digital Butterfly Effect
If one knows what the Chaos Theory “Butterfly Effect” is all about (small things, big impact), there’s also a wealth of info about the updated “Digital” version of that concept. It generally relates to avoiding technical debt… something a good outsourcing partner will assure… butterfly-effect avoidance.
But however modernized the notion becomes, good ’ol Benjamin Franklin* said it best:
“For want of a nail, the shoe was lost.
For want of a shoe, the horse was lost.
For want of a horse, the rider was lost.
For want of a rider, the battle was lost.
For want of a battle, the kingdom was lost.
And all for the want of a nail.”
(a.k.a. A little neglect may breed great mischief)
—The Papers of Benjamin Franklin, 1756-1758 (paraphrased)
Now, beyond the butterfly metaphor and back to the digital tool itself… it will be one that is highly unique, and one that is only enabled (developed) as well as verified through its documentation.
That documentation can include, but is not limited to, things like… how the new IP tool functions (specific details)… what the user story is (who is able to do what with it and how)… and what comprises the acceptance criteria (pre-established performance standards).
That type of documentation. That contributes to its development and to it being valid IP. And then IP clauses in contracts are necessary for protecting it (that is, consult a legal advisor).
A savvy outsourcing partner is the engine that can help satisfy the vision and create IP. A partner that knows how to avoid the digital butterfly effect by starting out on the right foot and ending up there, too.
1“Poor Richard Improved, 1758,” Founders Online, National Archives, https://founders.archives.gov/documents/Franklin/01-07-02-0146. [Original source: The Papers of Benjamin Franklin, vol. 7, October 1, 1756 through March 31, 1758, ed. Leonard W. Labaree. New Haven: Yale University Press, 1963, pp. 326–355.], data pulled, Aug 12, 2022.