Out-sourcing is a successful alternative to traditional mergers

I read with interest your article Mergers: the key to making them work (DW 31 October). I am surprised at the omission of any comment on the emerging interest in out-sourcing internal corporate design studios.

On 1 July Andersen Consulting out-sourced its internal design unit, Creative Design Services, to Real Time Studio. The deal inc-luded the transfer of 25 people and a substantial amount of business.

This equated to a more sizeable package, with greater implications for a larger number of people than some of the mergers you quoted. In a deal of this nature all of the considerations you cited are just as applicable.

Unlike the desktop publishing revolution of the late-Eighties, when secretaries, technicians and frustrated professionals grasped the opportunity to be “creative” by the mouse, corporate firms are not as prepared to have their staff experiment with the clearly non-core business of new media development.

As this is the area in which many of the internal design departments wish to develop, the option for out-sourcing is becoming increasingly attractive.

Contrary to the quote in your article from Ian Cochrane of Tice Group that “80 per cent of mergers and acquisitions in the industry fail, because they are not in the interest of their clients…” an out-sourcing deal of this nature is primarily in the interest of the client. The client retains the accumulated knowledge of staff, while relinquishing the responsibility for the management of talented personnel whose careers may be hampered by the limitations of the corporate structure.

In addition, they abdicate responsibility for investment in the latest technology and training required for the maintenance of the in-house studio, be it focused on design for print, design for new media or both.

Naturally, there may be concerns from existing Real Time clients, but these should be in some way allayed by the fact that much of the consultancy’s work is delivered via satellite operations and dedicated teams thus negating any issues of individual divided loyalties.

Watch out for many more “mergers” of this nature.

Steve Larkin

Manager corporate accounts

Real Time

London W1