The Survey Geek

The limits of outsourcing

Virtually every MR company of any size that I can think of does some amount of outsourcing to offshore entities, whether to a wholly-owned sub or one of the major providers of market research services. The attraction has tended to be threefold: (1) a smart, well-educated labor force; (2) a near fanatical reverence for process; and (3) and significant cost savings. The companies that do this work provide an increasingly broad range of services including data collection, survey programming, tabulation, charting, and basic analysis. Some have become very large and there are those who believe that they may soon evolve into major, global full-service research companies in their own right.

But there are also are those who argue that outsourcing may becoming the victim of its own success, that its traditional strengths may now be weaknesses. In an interview out on cio.com Andrew Wasser from Carnegie Mellon University sees IT outsourcing as now facing two major challenges. The first is talent. As the outsourcing industry has grown the demand for top tier talent increasingly surpasses what the in-country universities can deliver. They no longer can count on getting the top decile of math, computer science and engineering graduates. MR outsources probably always had trouble competing against the Accentures of the world for top talent and likely are moving even further down the chain as the big IT firms grow. The second challenge is difficulty innovating. The strong process infrastructure that has made these companies terrific order takers and on time quality performers also makes it difficult for them solve problems that their processes were not designed to handle. And, more often than not, outsourcers see only one part of the elephant, don't have a grasp of the business problem at the core of the research and can't be the creative strategic partners that the sourcing company had hoped for.

None of this necessarily means that we have reached the limits of outsourcing. But we need to think much differently about how we structure our relationships with our outsourcing partners and be sure to be realistic about what we can get out of those relationships. We can't just keep throwing the work over the wall which unfortunately is what a lot of us have been doing. We probably need to get really serious about treating them like partners, figuring how to do a better job of integrating them more fully into our workflow, and be a good deal more realistic about what we can expect to get out of them.

MR is not doomed, at least not yet

It’s Friday, an often slow day to start, and like many other people here in southeastern Michigan where I live I’m holed up at home with a  backpack full of work I brought home last night in anticipation of the crippling snow storm that was widely predicted but never came.  Catching up on my reading seemed like a good place to start and I was especially intrigued by the current issue or Research World.  The issue is titled, “Irrevocable Change: The digital revolution is transforming the market place.”  That title is a little hyped up for what follows because the issue itself is mostly a welcome relief from the apocalyptic pronouncements that have become the standard fare of any discussion of how MR should confront the economic, social and cultural changes flowing from global digitalization.  In his editorial Simon Chadwick sounds downright confident when he writes, “We have the talent, ability, methodologies and technologies to be able to manage the data deluge, and to provide the frameworks with which to analyze it and derive the insights which it is capable of providing.”  The articles in the issue taken as a whole seem mostly to argue for accommodation, augmentation and creative evolution rather than replacement, destruction and revolution.  We are indeed at an inflection point, as Simon describes, but that doesn’t mean we can no longer deliver value. It only means that we have to be smart and thoughtful about how the frameworks we choose genuinely help clients makes sense of the data deluge, because that, after all, is the point of it all.

As luck would have it, I subsequently came across this piece In Research by Tom Ewing that seems relevant to the process by which we choose those “frameworks” that Simon mentions.  Tom points out that with the help of the behavioral sciences we more or less have come to accept the idea that consumers don’t make completely rational purchase decisions, but that they are influenced by all sorts of things that we are only beginning to understand.    He invites us to view the decisions that we make as researchers about methodologies, for example, through the same lens we view the choices consumers make when we study them.  And he points out that when you do that you find that many of these decisions are, well, irrational in that they are less about how best to deepen a client’s understanding of a business problem than about ourselves—the methodologies we love, the need to appear hip and innovative.   

Living in a world with so much data and so many cool technologies is both a curse and a blessing.  As John Gambles says in the same issue of Research, “The industry has lost its way and allowed process to overtake purpose. And the value of research is not in the process but in its purpose.”  We probably should spend less time worrying about being gobbled up big new well-funded competitors who don’t know what we know about consumers and our clients’ businesses and more time remembering why this industry exists in the first place.

ISO 20252 – Market, opinion and social research

In December we were audited for ISO compliance. After a week of staff interviews, project reviews and records inspections we were certified to the 20252 standard. Good for us!

Now I recognize that there are more than few people in the industry who think ISO certification is some kind of retro thing that does not reflect how much the industry is changing. More on that in a bit. But first let me say that when it's all said and done ISO 20252 comes down to four pretty basic things:

1. Making sure that people know how to do their jobs and can succeed in the assignments we give them.
2. Ensuring that everyone on a project team understands their individual roles, the roles of their colleagues and how to work as a team to produce great work for their client.
3. Being completely transparent with clients about what was done and how it was done so that they can make whatever business decisions they need to make with confidence.
4. Minimizing the mistakes that generate rework and disappoint clients while maximizing the chances of learning from those mistakes.

Now back to those folks who say that ISO is for the dinosaurs and out of place in the fast-moving world of contemporary market research. Or that all that process ISO insists on works against the innovation that is the supposed life blood of boutiques and startups. I think that's nonsense. A well-defined infrastructure of process and procedures need not be a barrier to change. In fact, it can make it easier. In Good to Great Jim Collins observes that in great companies people work within the framework of a highly developed system that fosters what he calls "a culture of discipline." When you have a culture of discipline you spend less time managing people and more time managing the system. And when change is called for you change the system, not the people. That's also what ISO brings you. I recommend it to you one and all.

A butterfly flaps its wings . . .

My head is still spinning from having just read Lenny Murphy's quick analysis of the SurveyMonkey acquisition of some of the assets for MarketTools. In his piece he describes MR as an industry under siege, in a state of chaos that ultimately may dump the industry into the "dustbin of history." Three things about this bother me.

First, I'm not biting on the rumor sourced from "a person with knowledge of the matter, who spoke on the condition of anonymity" that SurveyMonkey has a valuation of $1 billion and therefore needs to be taken seriously. Does anyone really believe that a SurveMonkey IPO would raise a billion? Or that anyone would consider writing a check of that size to acquire them? They may be the 800 pound gorilla in the DIY space but that hardly puts them in the upper echelon of research companies.

Second, the day has long since passed when a MR company could compete on the sort of simple and straightforward data collection that DIY makes possible. Any company in this industry that has not figured out a much more compelling value proposition is either already in that dustbin or about to fall in.

Finally, there's no question that the main impact of DIY has been and will continue to be a dramatic increase in the number of really bad surveys flowing into people's inboxes. However, that's not what ultimately will determine the impact of DIY. DIY will be judged like any other research approach. Clients will decide whether or not it's helping them make better business decisions, improve their business results. If they can get the same or better insights from DIY than they get from their MR suppliers then we deserve to be sent packing.

I'm not as worried as Lenny.

Eric Salama on Radio NewMR

This morning I listened to an interview of Eric Salama, CEO of Kantar (and now TNS as well), on Radio NewMR. I know Eric Salama by name only and was interested to hear his take on the future of the industry.

Overall his message seemed to be that our industry should focus on its strengths rather than becoming distracted by worries about big players from other industries coming in and eating our lunch. There are now many sources of insight that go beyond the world of surveys and focus groups. MR might exploit some of them but he sees no mandate to exploit them all. Four things in particular stood out in my mind:

• Surveys are not dead yet. There are some things you can only learn by asking people questions.
• There sometimes is a disconnect between what we hear about the explosion of new methods and client spend. His specific example was social media whose current share of client spend he characterized as "unimpressive."
• MR firms generally lack the technology to compete with major players like IBM when it comes to Big Data. Crunching massive databases of unstructured data is not what we are good at. We are good at analysis and that's where we should focus.
• Qualitative is a major opportunity, at least for a big player like Kantar. He sees the qual side of the industry as still very fragmented and a place where there has been a good deal of innovation still to be leveraged.

The interviewers—Ray Poynter and Lenny Murphy—did their best to get him to bite on more apocalyptic futures for MR but he would have none of it. Still, it was an interesting half hour. But don't take my word for it. You can hear a recording of this morning's show along with previous shows here.