In-house Photography and Outsourced Photography - Kudler Fine Foods - Essay Example

Running Head: Analysis of In-house Photography versus Outsourced Photography Analysis of In-house Photography versus Outsourced Photography: Case Study of Kudler Fine Foods (Style: APA) Writer ID #: 19714 Order No. 288307 [Name] [University Name] [Course Name] [Supervisor] [Any other details] 12 April 2009 Abstract: In this paper, the author has presented the advantages & disadvantages of outsourcing photography pertaining to the case study of Kudler Fine Foods. The author has presented the arguments in a structured format that helps in concluding whether photography of a small food store should be outsourced to a third party photographer. After the analysis, the author has concluded that photography should remain in-house for the Kudler Fine Foods. Table of Contents: Introduction: Yang and Huang (2000. pp233) discussed a decision model, called analytical hierarchical process (AHP), of outsourcing pertaining to the factors and attributes that affect the outsourcing decision. They presented the key factors as - Management, Strategy, Technology, Economics and Quality. To add more to these decision points the author presents the arguments by Lankford and Parsa (1999. pp310-312) who insisted that an organization should consider economies of scale, inability to manage the function in-house, strategic realignment, need for focus on core business, short & long term financial advantages, and impact on company's competitiveness when deciding for outsourcing. Roy and Aubert (2002. pp32-33) presented a strong statement on outsourcing decision stating that "outsourcing would be appropriate for activities requiring non-strategic resources while activities linked to key competencies should be jealously kept in-house". They argued that the business critical processes, information & intellectual properties of the organizations should be kept out of the outsourcing framework and the organization should consider outsourcing only those work that does not comprise of the key competencies of their business model and do not invite any legal trouble for the organization if there are breaches by the outsourcing vendor. They presented the following model of outsourcing decisions: Figure 1: General Framework for Outsourcing Decision - Roy and Aubert (2002. pp32) As presented in the figure, the authors argue that outsourcing should be carried out only for those aspects of the business that possess strategically low value and possess lesser presence of strategic resources. Based on the arguments and empirical generalizations by these scholars, the author presents the following decision criteria for Kudler Fine Foods for outsourcing photography: (a) It should not be part of the internal business competency of the organization. (b) It should not comprise of high strategic value or high value strategic resources. (c) There shouldn't be any legal issues. (d) It should make economic sense for the organization. (e) The technology is too complex & expensive to be handled in-house (f) The function is too complex to be handled in-house The author presents an analysis of photography outsourcing versus in-house for Kudler Fine Foods in the subsequent sections. Pros and cons of outsourcing the photography to a professional photographer or creating the infrastructure to take the photographs in-house Before we argue on whether photography should be outsourced by Kudler Fine Foods, it is important to judge whether this is critical for the business. The primary objective of photography in the business of Kudler Fine Foods is to advertise the images of actual organic products of the store on the Internet and in the Print media. It appears that the actual purpose of Kathy Kudler is to enhance the competitive advantages of the store. Hence, the photography may require lot of internal understanding of the business & products and may demand innovations & ideas from the internal employees who have worked hard to bring the stores to this level of success. It may be wiser to develop the photography competencies in-house rather than to outsource to a professional photographer who may be very good at taking images but may not know the choices of the store customers and the factors influencing the valuation that they have perceived about the stores. The images in the advertisements will reinforce those valuations by the customers and hence need to be very carefully presented - requires lot of knowledge about customer & market orientation. However, on the contrary the in-house Howe deployment of photography will require development of a new competency and substantial one time investment of the equipment which is presented later in this paper. It will take quite some time before the company gets into a business as usual mode in photography. The company can be saved from these hassles by outsourcing this operation to an external professional photographer. Legal issues and how they would be handled under the in-house and outsourced models Epstein (2002. pp1-3) presented ten legal issues of outsourcing pertaining to scope, change in order, prices, relationship management, information security & privacy, intellectual property protection, ownership of deliverables, service level agreements, limitation of liability, people & facilities and termination. Majority of these legal issues appear to be pertaining to contracting. In the case of Kudler Fine Foods these issues appear to be applicable but the most prominent ones are information security and intellectual property protection. This is because the photographs of food items shall be copyrighted by the organization and hence their original copies should be secured within internal computer systems. These rights may have to be purchased from the photographer every time photographs are taken and also the organization may have to work with their terms; misuse of photographs by the photographers again will remain a concern. Also, the images will comprise of photographs of employees of the store which should not be done without written consent of the employees as there are stringent acts (US Privacy Act; Data Protection Act) pertaining to personal information protection (Stratford and Stratford. 1998. pp1-2). To be on safer side, it is better to avoid allowing external photographers to take images of internal employees. If done in-house, what equipment would be required and what costs would be incurred If the photography needs to be done in-house, the following equipment shall be needed: (a) Digital Camera: $150 (http://digitalcameras.bizrate.com/brand--sony/products__att259--390-.html) (b) ULead Photoimpact Digital Image Processing Software: $80 (http://www.vicman.net/getfree/digitalimageprocessingsoftware.html) (c) Epson Stylus CX8400 All-in-One Printer: $100 (d) Laptop with high end graphics capability (say Sony Vaio): $1000 Total one-time cost - $1330 Running cost - 30 cents per photographic paper (estimated) People efforts (shared with other accountabilities) - $500 per month (estimated) Professional Photography training for two people: $500 (estimated) The estimation reveals that building internal photography competency will not cost substantially high. How the photography would impact the day-to-day store operations under each model It is expected that taking photographs of current products in the store and publishing through a website will enable the customers to view what is available in the stores without even visiting them. Hence, when they come to the store they would be prepared with their choices and if the look & feel of the products match the ones present in the store, the customers would be delighted and may prefer to order remotely without bothering to visit the store. Hence, this system can potentially open an entirely new opportunity of Business to Customer E-Commerce system whereby the customers can order & pay online and the stores can deploy dedicated delivery personnel to deliver the products at home at reasonable charges. However, this would be possible only if the customers get the same look & feel in the products delivered at home as they see in their photographs. This means that the photographer has to be professional enough to develop this virtual reality for the customers. If this competency is developed in-house, the photographs can be uploaded almost immediately on the Internet as soon as new products are added on the shelves. However, if this process is outsourced the store management will have to keep fixed time for the photographers to visit and will have to keep a log of the shelves that have been populated with new products before the photographer arrives. Also, the photographer may not deliver the soft copies of the images on the same day after processing in the studio. This may require changing of the internal business process as per the terms of the external photographers which may be a hindrance to improvement of competitive advantages. How often new photographs could be taken under each model New photographs can be taken as and when the shelves in the store are populated with fresh consignment of products. Hence, it would be expected that photographs shall be taken many times a day such that the images can be uploaded on the Internet for the customer to know what is available immediately. The customers who would get used to this system will develop the habit of visiting the websites multiple times a day to discover what new has been added such that they can plan their purchases proactively. On the contrary, if the store management is dependent upon an external photographer they will have to upload images at fixed times during the day which may not be as effective from customer's perspective. Also, the updated images of products may not be uploaded on the same day. The images may be older by one day or even more if the photographer doesn't turn up on certain days. The potential uses of the photographs and those implications under each model The process of frequent instances of taking photographs of fresh products in the store, image processing them quickly and then uploading them on the Internet will definitely enhance the competitive advantages of the store. As explained above, this may result into customer delight and a new means of ordering & product delivery mechanism that may enhance the revenues of the store and increase the customer loyalty. Ravald and Grnroos (1996) presented the empirical generalization on buyer value stating that it value is increased when an organization improves the benefits of the core product and reduces the sacrifice that the customer needs to undertake to purchase a product - like lower prices, improved convenience of purchase, better delivery services, error free paper work, etc. This theory gives us a hope that the strategy of using most current photographs on Internet will improve the competitive advantages of the stores. However, if the photographs are old, then at times the store management may have to refuse the product delivery given that the items may have been sold at the time the order is placed. Hence, the store management may not be able to project the validity of the photographs and end up causing customer dissatisfaction. Hence, the outsourcing model may end up harming this business competency rather than supporting the same. Recommendations Now, we analyze the feasibility of outsourcing against the conditions that were set forth in the introduction section: (a) It should not be part of the internal business competency of the organization: After going through the details of the enhanced business competency that is expected to be achieved, it can be concluded that photography cannot be de-linked from the internal business competencies of the organization. (b) It should not comprise of high strategic value or high value strategic resources: The photographs are of high strategic value to the organization given that they are expected to enhance the customer satisfaction & loyalty. Moreover, the person taking the photographs is a resource of high strategic value given that timing of taking photographs is the key component of this entire business process. (c) There shouldn't be any legal issues: Legal issues are prevalent pertaining to intellectual property rights, privacy rights and data protection act as discussed above. (d) It should make economic sense for the organization: It is not making economic sense because one time deployment and training is not substantially high and the recurring cost is expected to be much cheaper compared to the professional fees of the photographers. (e) The technology is too complex & expensive to be handled in-house: The technology is very simple and any one can handle the same after some training. (f) The function is too complex to be handled in-house: The function is very simple to be handled in house - just one time training and orientation is required. Hence, the author recommends in-house photography as against the outsourced model. Although it will require one time investment in equipment and shared time of staff members, it is still less expensive than paying professional fees to external photographer, buying the rights for use, and having to adhere to the photographer's terms of use of the images.In addition, in-house photography will provide the leverage to produce images more often and on time (as soon as the products are populated on shelves). This will help in fulfilling the primary business objectives of taking photographs. Conclusion: The author presented the decision process of outsourcing and arrived at the fundamental points influencing the decision criteria for outsourcing. The author applied the decision criteria to the case study of Kudler Fine Foods. After discussing the implications against each of the points arrived at from literature review, the author concluded that outsourcing of photography by Kudler Fine Foods is not feasible. Reference List: Epstein (2002). Ten Legal Issues of Technology Outsourcing. Baker, Donelson, Bearman, Caldwell & Berkowitz, PLC. Retrieved on 12 April 2009. Available at http://www.bakerdonelson.com/Content.aspxNodeID=200&PublicationID=4pp1-3 Lankford W. M. & Parsa, F. (1999). "Outsourcing: A primer". Management Decision, Vol. 37. No. 4. pp310-312. MCB University Press. Ravald, A. and Grnroos, C. (1996). The Value Concept and Relationship Marketing. European Journal of Marketing, Vol. 30, Issue 2, pp.19-30. Roy, V and Aubert, B. A. (2002). "A Resource-based analysis of IT sourcing", Database for Advances in Information Systems, Vol. 33. No. 2, pp32-33. Stratford, Jean Slemmons and Stratford, Juri. (1998). Data Protection and Privacy in the United States and Europe. IASSIST Quarterly. pp1-2. Yang, C. & Huang, J. (2000). "A decision model for IS outsourcing". International Journal of Information Management, Vol. 20. pp233. Published by Elsevier & Pergamon. End of Document Read More