Insourcing vs. outsourcing: the strategic choice for your mail operations

A balanced approach to mail operations

In today’s digital age, when a company’s communication strategy with its customers is ever more critical, one major decision confronting businesses is whether to outsource or insource their mail operations. Mark Fallon, President and CEO of The Berkshire Company, a consultancy specialising in mail and document processing strategies, emphasises that the decision isn't as simple as it appears.

Breaking down the myths

A common belief is that outsourcing is always the cheaper route when compared to insourcing. Fallon challenges this notion. “Outsourcing or insourcing, each has its unique costs,” Fallon says. “Outsourcing includes costs for managing the relationship, the profit of the company providing the service, and any taxes on the services. Insourcing, on the contrary, involves costs for space, equipment, utilities, and overhead. A comprehensive analysis is necessary to determine which is more cost-effective.”

Additionally, outsourcing doesn't mean that you're offloading all your problems. “Outsourcing just shifts your problems to a vendor," Fallon points out. If customers are unhappy with a service, merely outsourcing it won't necessarily solve the issue.

Understanding the risks

Outsourcing mail operations can also bring new challenges, particularly around privacy and security breaches. Karim Manassa, National Solutions Consultant for Compliance & Business Regulations at Pitney Bowes, warns of the potential risks. He suggests that privacy breaches may cause significant damage to a brand's reputation and trust among its customers.

Ensuring data security

Manassa emphasises the importance of protecting sensitive data included in the mailings and staying in compliance with state and federal laws. "If you're in a vertical such as finance or healthcare, you need to really vet your vendor to make sure they have that security,” Manassa warns.

Trusting your vendor

David Bilodeau, Director, Product Marketing, suggests businesses can gain trust in vendors by learning about their experience — not just their years in the industry, but also the clients they've served.

For instance, consider the banking sector which processes a large volume of mail every day. These financial institutions often handle everything in-house, which leads to increased costs and resource allocation. By outsourcing their mail delivery needs to a trusted partner like Pitney Bowes (and leveraging our Hybrid Mail Solution), banks can utilise years of expertise and a diverse portfolio of previous work that spans across multiple sectors.

Hybrid Mail streamlines the process by taking control of the mail creation, sorting, and delivery. This not only frees up resources but also offers peace of mind that your mail is being handled with the utmost professionalism and efficiency.

Making the right choice

Fallon suggests that insourcing might be a better choice for organisations for whom mail operations are critical, like utility companies and banks. On the other hand, for businesses, like grocery stores and florists, where mailings are secondary to in-person interactions, outsourcing might be a more viable option.

Fallon also touches on an interesting perspective, "If your mail operations directly support your business, having an in-house team means you're not just a customer.”

In conclusion, the decision isn't merely binary. A blend of insourcing and outsourcing could be the optimal strategy for some companies. As Manassa puts it, "It's not always black and white."