Putting aside that point, there’s certainly nothing unusual about jobs moving overseas. What I find interesting, though, is that one of the first business processes to be outsourced in the US was trade promotion administration, but it has yet to be outsourced overseas.
Outsourcing of co-op advertising management began in the early 1950s, mostly as a protection against regulatory agencies rather than as a quest for efficiency. It has continued through the ensuing decades as a small but thriving niche business in the US, possibly too small for the major overseas BPO firms to take an interest in it.
As I was reading the Wal-Mart article, though, and pondering why TPM outsourcing remains firmly on-shore, it occurred to me that the opportunity for foreign (Indian and other) BPO providers may lie in providing TPM IT and/or process outsourcing to CPG manufacturers.
The companies that do TPM outsourcing in the US focus almost entirely on the consumer durables and business-to-business sectors – not a surprise, because that’s where back-end checking of documentation and processing of claims is still done. They have practically no clients in the health and beauty care, food and beverage, or related categories.
The categories not served by the existing US outsource companies are the largest spenders in trade promotion, and make the largest investments in IT and human resources to manage that spending. They have elaborate and very expensive software (home-grown or licensed from companies such as Oracle and then customized to their needs) to manage their programs, plus in many cases additional software to analyze the results of the program, and perhaps another package to manage the deductions associated with the program.
In some cases these various software packages are integrated, in other cases not (in most cases, probably, they are somewhat integrated). In all cases, there are significant numbers of people to perform the human tasks connected to program management, deductions, and analytics, in addition to the staff assigned to maintain the software.
Two opportunities exist, therefore: First, to manage the TPM IT needs of customers, perhaps helping them integrate their software into a coherent whole; and second, managing the business processes associated with TPM.
A BPO who could take these burdens off a company’s hands, and allow the company to concentrate on the strategic uses of trade promotion rather than administration, could find a lucrative new revenue stream, and one that is currently uncontested.