Knowledge Process Outsourcing: Get Smart Now!

On 12 June, the transition from a service-based economy to a knowledge-based economy was the focus of this blog. This is the second in a series of articles regarding our competitiveness in the knowledge-based economy and the marketing opportunities associated with this competitiveness. Today’s topic is Knowledge Process Outsourcing (KPO). It is the one area of outsourcing in which the USA remains competitive (having ceded Information Technology Outsourcing (ITO) and Business Process Outsourcing (BPO) to India, China and other developing nations).

KPO consists of activities such as investment research services, marketing research, analytics and intelligence, engineering research and development, pharma/bio-tech research and development, legal research services, animation, content/publishing and education/e-learning. It is the fastest growing segment of outsourcing with a compound annual growth rate of 58 percent for the period 2005-2010. Steady growth in KPO services is projected to continue well into the next decade.

In a paper published on 1 March 2010, Gereffi and Fernandez-Stark identify the top ten KPO firms as of 2009 based on total revenues. Below is a listing of the headquarters of record for each firm identified in their article. Industry consolidation is making the determination of country-of-origin almost impossible.

Top 10 Knowledge Process Outsourcing Firms (2009):

  1. Gartner, Stamford, Connecticut, USA
  2. Genpact, Gurgaon, Haryana, India
  3. WNS, Mumbai, Maharashtra, India
  4. Forrester Research, Cambridge, Massachusetts, USA
  5. Evalueserve, New Delhi, India
  6. Integreon Managed Solutions, Los Angeles, California, USA
  7. CPA Global, St. Helier, Jersey, UK
  8. Pangea3, New York, New York, USA
  9. Fractal Analytics, Jersey City, New Jersey, USA
  10. Boston Analytics, Cambridge, Massachusetts, USA

To remain competitive in KPO services and in the knowledge-based economy requires more education, not less. In marketing, the future for students with demonstrable skills in marketing research, marketing analytics and metrics, digital marketing, inbound marketing, content-based marketing and database marketing looks promising. Most of these jobs require strong mathematical and analytical skills as well as an understanding of basic HTML, JavaScript, CSS and XHTML/XML coding.

Regionally, the outlook for jobs in the knowledge-based economy is positive. Five of the top ten KPO firms have headquarters located in the north-eastern corridor and two are located the Boston area. Somewhat optimistically, a recent posting on HubSpot identifies Boston as the future “Hub” or center of all things marketing.

The economic well-being of our region is dependent upon the success of our KPO and service firms. The success of these firms is predicated, in part, on the availability of highly educated marketing talent. Your future and their future demand that you get smart now.

Share

Open Source in Higher Education: Envisioning Change

“Although I do not, with some enthusiasts, believe that the human condition will ever advance to such a state of perfection as that there shall no longer be pain or vice in the world, yet I believe it susceptible of much improvement, and most of all in matters of government and religion; and that the diffusion of knowledge among the people is to be the instrument by which it is to be effected.”Thomas Jefferson to Pierre Samuel Dupont de Nemours, 1816. ME 14:491

 

Recently, the cost of public and private higher education has received attention in the mass media. In May, the New York Times published a series of articles (Plan B, Weighing the Costs and Student Loans) highlighting much of what is wrong with the current model: Colleges and Universities have priced themselves out of the middle-class market. State investment in public higher education is dwindling to the point that the designation of the public university is becoming a misnomer. At best, the new paradigm for public universities is that they are state-assisted. At worst, the harsh reality for public universities is that they are merely state-located (i.e., operating much like private universities but under the state banner). Rather than address the debate regarding who should shoulder the burden of the cost of higher education (the state versus the individual), my purpose is to highlight innovative efforts to address the problem, and thus remain true to Jefferson’s Utopian vision of an educated populace.

 

A Hidden Cost of Attending College: Textbooks

As of 1 July 2010, the Federal Government as part of the Higher Education Reauthorization Act has decreed that faculty must publicize their textbooks for an upcoming semester at the time students register. Failure to comply will result in a loss of Title IV Federal Financial Aid for the University. The purpose of the act is to provide students with full and transparent information regarding the cost of their course selections (thus, eliminating or mitigating the hidden cost). Textbooks are expensive and can cost students between $500 and $1,000 per semester (depending upon the course of study).

Creative open source alternatives are emerging to address this issue. The OpenCourseWare Consortium, launched in 2005, grew out of the MIT OpenCourseWare project launched in 1999. More than 200 colleges and universities world-wide participate in the OpenCourseWare Consortium. Professors and students can obtain syllabi, lectures and course materials from the website. (As an aside, MIT OCW announced on 12 May 2010 that it was adopting the python-based open source publishing environment Plone for its open courseware content management).

 

Another good resource for instructors looking for open source materials to use in their courses is the Multimedia Educational Resource for Learning and Online Teaching, or MERLOT. MERLOT serves as a repository for all things open source that pertain to education. It interfaces with the OpenCourseWare Consortium so there is some overlap in materials available for adoption. Both resources provide an affordable, high quality, open source option to professors who are concerned about the burden of the price of textbooks on their students.

And finally, a new textbook publishing model has been established by an innovative company called Flat World Knowledge (disclosure: I have a non-compensated professional affiliation with Flat World Knowledge). Launched in 2007, Flat World is quickly turning the textbook publishing industry on its head. Already the recipient of numerous awards for its innovative approach, an article regarding its disruptive business model may be accessed here.

 

As more textbooks become available via Flat World, complete with supporting or ancillary materials (powerpoint lecture slides, audio lectures, testbanks), it is expected that the adoption of these textbooks will grow exponentially. A colleague (Dr. Godwin Ariguzo) and I used the Flat World Knowledge marketing principles book to build the marketing principles course for the next innovative endeavor highlighted: The University of the People.

Free Access to Higher Education Online: The University of the People

Founded by award-winning entrepreneur Mr. Shai Reshef, the University of the People commenced classes on 10 September 2009. With the backing of the United Nations’ Global Alliance for ICT and Development and in partnership with the Yale Law School Information Society Project (ISP), the University of the People utilizes the active learning methodology or “learning-by-teaching” model. Courses are developed by content experts (disclosure: I am a non-compensated course developer for the University of the People) and offered as online courses using the Moodle open-source learning platform.

 

Think about it: providing students in the developing world with free access to higher education. It’s very Jeffersonian and may be the much-needed catalyst for sustainable economic development on a global basis. Intolerance is an outcome of ignorance. Likewise, ignorance begets poverty. By providing open access to higher education, one can envision a more tolerant Utopian world where the gap between haves and have-nots is diminished.

Envisioning Change

So what does all of this have to do with the status of higher education in the US? Clearly the need for an innovative new model is apparent: one in which barriers to access are removed or at the very least, tolerable. Innovative instructional methodologies and content delivery systems are reducing the need for huge investments in fixed assets by universities. It’s not hard to envision a time when the traditional four-year on-campus university residential experience becomes a thing of the past. After all, colleges and universities are the penultimate content marketers. To survive in challenging economic times calls for a radical shift in the concept of the university, course delivery and the college experience. Innovations in technology are making it possible to deliver courses asynchronously. I’m hopeful that in the near future, you’ll be accessing my marketing and international business courses from your mobile phone. I’m even more hopeful that I’ll be delivering these courses to you from my beach house after spending the morning surfing with Izzy Paskowitz (my Father’s day fantasy).

The open source movement is making the fantasy of access to free education a reality. It’s too bad that it didn’t happen in Jefferson’s lifetime. Happy Father’s Day.

Share

The Evolution of Marketing

Marketing is commonly believed to have progressed through five distinct phases of evolution since the beginning of time: the simple trade era, the production era, the sales era, the marketing department era and the marketing company era. This is the classical progression taught in business schools today to tomorrow’s marketing leaders. But is it an accurate and complete representation of the different eras of marketing? In my opinion, the answer is no.

The premise of this blog is that since post-World War II, marketing is evolving in twenty year cycles, more or less. Thus, while the classical five era progression is taught in business schools, seven distinct eras are apparent. Why is this important to marketers? It may not be. Or it may represent the difference between success and failure. Knowing the game and how it is played is a necessary and critical component of winning the game. Let’s review the five classical eras before making the case for the two new eras.

The first is known as the simple trade era, where everything available was made or harvested by hand and available in limited supply. Exploration (some contend exploitation) and trade in resources was the focus of the economic activity. Commodities ruled the day. Because we’re somewhat lazy as theorists, this era is described as having lasted from the beginning of time through the mid-19th century. The simple trade era was replaced by the production era at the time of the industrial revolution. Mass production increased the availability of product options in the marketplace. This is the era of the field of dreams business philosophy of “if you build it, they will come”, successful only because there were few alternative product options available. This marketing era lasted approximately 60 years from the 1860’s until the 1920’s.

The sales era (1920’s – 1940’s) followed the production era once pent-up consumer demand became saturated. No longer could businesses easily and readily sell everything they produced. Competition for market share increased. Companies had to work harder to sell their product to consumers. Commoditization emerged: products became commodities and price became the distinguishing competitive advantage. The archetype representing the end of this era is Willy Loman. The post-WW II economic boom fostered the emergence of the marketing department era where manufacturing firms realized that the sales orientation of the past was not resonating with consumers. New levels of affluence provided consumers with more power in the marketplace. Businesses consolidated marketing-related activities (advertising, sales, promotion, public relations, etc.) into a single department. In my opinion, this is the period of “the great awakening” in western business: the time when the realization that marketing is the reason that business exists emerged. This period lasted from the 1940’s through the 1960’s and is typified by my favorite brand repositioning phrase: new, improved and lemon-scented.

The marketing company era emerged once the premise of the marketing concept became widely accepted. The marketing concept, in brief, contends that businesses exist to address customer needs. That is, the customer is the focus of our business endeavors. No longer was marketing compartmentalized – it became the goal of the business. All employees became part of the marketing effort, either directly or indirectly, and the customer became king. In the classical theory of marketing evolution, this is the final phase. It began in the 1960’s and is still in play.

But is it? Obviously not. In an article entitled “Marketing: Historical Perspectives”, a sixth era is identified: the relationship marketing era. The goal is to build a long-term, mutually beneficial, relationship with the customer. The focus changed to lifetime customer value and customer loyalty. Peppers and Rogers ushered in this era with their 1993 book “The One-to-One Future: Building Relationships One Customer at a Time” (disclosure: Martha Rogers was my advertising professor). Customer relationship management (CRM) and data-mining became the buzzwords in marketing. Getting all systems in sync to capture information about each customer’s behavior is still, at best, a work in progress. The key to building relationships is trust, thus its importance as the central tenet of relationship marketing. Clearly the relationship marketing era exists and is in play today, from the 1990’s to 2010. But is it the end of the evolutionary process?

In April 2009, Forrester released “The Future of the Social Web” in which they identified the five eras of the social web. As with each previous change in marketing eras, this report serves to announce the paradigm shift from the relationship marketing era to what is identified here as the social/mobile marketing era. It subsumes the knowledge and theories of its predecessor era, as did each before, but focuses on real-time connections and social exchanges based on relationships driven by the consumers (permission-based or opt-in relationships). In this era, businesses are connected 24/7 to current, future and potential consumers in real-time. Communication and exchange of information is a critical success factor. But much like the predecessor eras, trust and maintaining a positive image are just as important.

From a marketing standpoint, two lessons are apparent. First, in the past the diffusion of innovation in marketing was unidirectional, from the academy (business schools) to business. Marketing theory drove business implementation of marketing practices. Today, this is no longer the case. Business schools lag businesses in the adoption and implementation of best practices in marketing to the point where current marketing education is out of touch with reality. A new game has developed and we’re barely aware that it exists. Thus, lesson one is to get your marketing education via sources from outside of traditional business schools. And second, as we transition from the relationship marketing era to the social/mobile marketing era, opportunities exist to grab market share, or share of voice, in the new era. Lesson two is that the time is now.

Share

All Things Marketing

This site is protected by WP-CopyRightPro