All About Research Process Outsourcing

• RPO is outsourcing research to an external company
• Successful utilization of RPO 
• Exploring the benefits, challenges, and strategies to maximize the impact 

What is RPO?

Research Process Outsourcing (RPO) is a form of Business Process Outsourcing (BPO). An employer transfers all or some of its research and analysis related tasks to an external service provider. This means that the outsourcing company will be responsible for conducting the necessary research on behalf of the client organization. RPO differs from Knowledge Process Outsourcing (KPO) as it focuses on research tasks like market research, data analysis, and competitor analysis. KPO involves more complex, knowledge-intensive tasks such as financial analysis, legal research, and strategic consulting.

 How does RPO work? 

1. The objective and scope of the work is clearly defined by the client. This includes specifying the type of research needed, deadlines, and budget constraints.

2. The RPO provider conducts the research, which may involve desk research, data analysis, market research, and interviews with industry experts.

3. The RPO provider then compiles the research findings and presents them to the client. On the basis of the information provided, the client makes informed business decisions.

RPO can be used when a company wishes to conduct research that falls outside the scope of its core competency.

Why should a company go for RPO?

RPO allows companies to focus on their core activities while utilizing the expertise of research teams. The organization continues to be incharge of the decision making process while having resources available to focus on other areas. They also do not have to worry about conducting the research themselves. 

Advantages of Research Process Outsourcing:

1.Freeing Up Internal Resources: RPO lets in-house teams focus on core business functions instead of spending time on the intensive and repetitive research process.

2. Flexible Scaling: RPO allows companies to scale research capacity up or down based on project needs.

3. Access to Advanced Technology: Many RPO providers use AI, ML or data analysis tools that may be too costly or complex for internal teams. This allows businesses to access high-end tech without investing in new infrastructure.

4. Cost-Effective: Hiring specialized analysts can be costly, especially for short-term needs. RPO provides affordable access to highly skilled researchers without the overhead of full-time salaries and benefits.

5. Knowledge Transfer Across Industries: RPO providers typically serve multiple sectors, so their teams bring cross-industry insights which can enhance research outcomes.

6. Improved Risk Management: By outsourcing research, companies mitigate the risk of internal bottlenecks like resource shortages. RPO firms are often well-versed in global research regulations and can help companies navigate compliance issues. 

These benefits help companies become more efficient and focused on growth and innovation in their respective industries.

Successful RPO

• The Pfizer Process

Pfizer has utilized RPO to streamline its functioning. All of Pfizer’s data management is outsourced, including data entry, monitoring, statistics and medical writing. How has Pfizer pulled this off? They standardized a few niche vendors under one business model. The firm no longer had any internal data managers or programmers. These tasks were carried out by the niche vendors according to their speciality. The internal employees set timelines, etc. The firm states that they have been able to cut staff, decrease transaction costs, and lower oversight. 

Pfizer utilized RPO to streamline research and development, allowing it to focus on its core competencies. This has enabled Pfizer to maintain the competitive advantage that it has in the pharmaceutical sector.

•  The Pioneer: Procter & Gamble

Procter & Gamble (P&G) is among the leading companies using RPO for improving its productivity. 

In 2001, the company launched the “Connect & Develop” model that changed their approach to Research & Development (R&D). Instead of solely relying on internal resources, they began to actively seek ideas from external sources. These outside sources included entrepreneurs, scientists, other companies, and universities. The goal was to source half of their innovation ideas from outside the company. 

With the integration of external expertise, P&G was able to bring out innovative products to the market effectively. This approach led to the development of successful products like the 33-cent razor and Tide Dry Cleaners.

P&G formed strategic partnerships with various RPO providers to access specialized knowledge and skills. This allowed them to tap into a global pool of expertise. For example, P&G collaborated with Jones Lang LaSalle to transform their outsourcing approach. They focused more on outcomes rather than transactions. 

Outsourcing research tasks has allowed P&G to reduce costs and focus on their core competencies. They have been able to streamline their R&D processes and allocate resources more efficiently. This has been crucial in maintaining their competitive edge in the consumer goods industry.

Disadvantages and How to Overcome Them

RPO has its share of challenges. However, they can be effectively managed with the right strategies. Here are some common disadvantages and ways to overcome them:

1. By outsourcing research work, the potential disadvantage could be toward ensuring its quality. The external provider may not always meet the company’s standards. This can be tackled by establishing clear quality standards. To ensure that the work meets your expectations, regularly review it and provide feedback. 
2. There is confidentiality risk whenever sensitive information has to be shared with a third-party. Strict confidentiality agreements and data protection measures should be in place. 
3. Over-reliance on external providers can lead to a loss of in-house capabilities. It is important to maintain a balance. 
4. It is imperative to have a clear understanding of what needs to be researched before outsourcing the task. Otherwise, the research team may not be able to deliver what is expected. 

Research Process Outsourcing offers a strategic advantage for companies looking to enhance their research capabilities while focusing on core business activities. Companies like Pfizer and Procter & Gamble have successfully accelerated innovation, reduced costs, and maintained a competitive edge through RPO. While RPO presents challenges these can be effectively managed by taking the right steps. Embracing RPO can lead to significant growth and innovation, making it a valuable tool for businesses aiming to stay ahead.

What is Research Process Outsourcing (RPO)?

Research Process Outsourcing (RPO) is a form of Business Process Outsourcing (BPO). An employer transfers all or some of its research and analysis related tasks to an external service provider. This means that the outsourcing company will be responsible for conducting all the necessary research on behalf of the client. 

How does RPO work?

The objective and scope of the work is clearly defined by the client. The RPO provider conducts the research. The research findings are then compiled and presented to the client. On the basis of the information provided, the client makes informed business decisions. 

Why should a company consider RPO?

RPO allows companies to focus on their core activities while utilizing the expertise of research teams. The organization continues to be incharge of the decision making process, while having resources available to focus on other areas. They also do not have to worry about conducting the research themselves. 

What are the advantages of RPO?

• Freeing up internal resources
• Flexible scaling
• Access to advanced technology
• Cost-effectiveness
• Knowledge transfer across industries
• Improved risk management

Can you provide examples of successful RPO implementations?

Yes, companies like Pfizer and Procter & Gamble have successfully utilized RPO. Pfizer streamlined its research and development processes. P&G’s “Connect & Develop” model revolutionized their approach to innovation. 

What are the challenges of RPO and how can they be overcome?

Challenges include quality control, confidentiality risks, dependency on external providers, and communication issues. Establish clear quality standards, enforce confidentiality agreements, and balance outsourcing with in-house capabilities for effective management.