Which approach is more in line with the characteristics of the fund industry? With this question, we recently visited more than 20 fund companies in Shanghai, Shenzhen and Guangzhou and asked their views on this issue. The results show that 82% fund companies tend to subcontract, and 18% fund companies tend to contract.
We find that the fund companies that tend to be general contractors are mostly new companies, with fewer personnel and relatively insufficient experience. They think that the general contractor has two advantages:
On the one hand, it can save energy. Public relations, advertising, material design, printing and logistics are all contracted to the same supplier, and only one supplier is targeted during the project, saving energy and personnel and shortening communication time.
On the other hand, the price is more favorable. Fund companies that choose the general contractor also believe that packaging all services to one supplier will get certain price concessions on the basis of scale effect, and suppliers will reduce the profit of each service and save money than subcontracting to multiple suppliers. Got the "wholesale price", which naturally saved the cost.
Fund companies that tend to subcontract are mostly established fund companies. Their reasons are:
First of all, subcontracting helps to solve accidents in a timely and effective manner.
Because subcontracting means that the fund company directly faces various suppliers, when there is a problem in one link, the fund company can respond immediately and communicate with the processing terminal immediately, so there is no intermediate link, so it is naturally more effective to deal with emergencies.
Secondly, subcontracting helps to spread risks.
Subcontracting is equivalent to dividing the risk into several parts When a subcontractor has problems, it will basically not affect the work of other subcontractors. Once the "general contractor" has problems, it will affect the operation of the whole service system, and no fund company can bear such risks.
Third, subcontracting can save money and effort.
In the process of outsourcing, the fund company can evaluate and communicate with each supplier separately, and the price negotiation can also be "intensive", which may save more money. It may take a lot of energy to start selection and negotiation in this way, but in the long run, once you choose a suitable high-quality supplier, future cooperation and communication will be very smooth and a lot of energy will be saved.
Fourth, subcontracting can accumulate more supplier resources for fund companies.
In the process of subcontracting, each fund company personally understands the characteristics of each supplier and reaches a certain degree of tacit understanding through cooperation. Choosing high-quality suppliers and realizing long-term cooperation will not only help to ensure the consistency of styles and processes before and after the company's work, but also help suppliers to know more about fund companies and provide better services. Fund companies have also accumulated their own supplier resources. After long-term cooperation, some suppliers will naturally offer preferential prices or rebate policies.
On the surface, contracting by a company will reduce intermediate links and save energy. But in fact, usually the "general contractor" can't complete all the work, and still have to find the final supplier to share part of the work, that is, to further subcontract the business. In this way, if there is a problem in any intermediate link, the fund company must communicate with the "general contractor" first, and the "general contractor" will find the final supplier to solve it. In fact, the addition of intermediate links will naturally affect efficiency. So it's not labor-saving.
On the surface, general contracting means getting the "wholesale price", but in fact, the "general contractor" often draws a certain profit from the final supplier, which is equivalent to an extra intermediate link. So don't save money.
In addition, in actual operation, some unexpected situations will inevitably occur, and most of them need to be solved in time and effectively to ensure the smooth issuance of products. However, due to many intermediate links, involving many suppliers and poor information flow, general contracting may affect the timeliness of solving problems.
This kind of practice is neither economical nor labor-saving, and it may also "delay things", so you really need to think twice before you act.
Outlook believes that the outsourcing model is more suitable for the fund industry:
1. From the phenomenon, we find that some fund companies adopt the way of general contracting when issuing the first fund, and adopt the form of subcontracting when issuing the second product. Judging from this phenomenon, with the continuous maturity of fund companies, more tend to subcontract.
2. Subcontracting is more in line with the social and economic development trend. Now it has entered the era of social division of labor, and various functions of all walks of life are constantly subdivided. For example, in the consumer goods industry, it is not uncommon to separate R&D, production and sales. Fund industry is also the product of division of labor. In the advertising service of consumer goods industry, it has become a reality and trend that there are different companies in the industrial chain such as marketing planning, creativity, graphic design, film and television production, media purchase and delivery. Only the division of labor can be professional, and only the division of labor can be fine.
3. Subcontracting is more in line with international practice. It is understood that no matter from the customer's choice orientation or the actual professional situation of suppliers, they are more inclined to subdivide. For example, Ogilvy & Mather has set up independent public relations companies and advertising companies, and does not do media distribution itself. We have reason to believe that the concept of "subcontracting" will be recognized by more companies in the fund industry. This article is taken from the research of Prospect Fund.