OUTSOURCING AND OFFSHORING: Can it work for publishers?

Introduction

• Outsourcing is currently one hot topic - a political issue in the last year?s US election, a headline of the last CBI conference and a frequent news item as one company or another announces an outsourcing deal or offshore operation. For some time outsourcing has been an operational activity of finance and technology companies; is outsourcing a viable proposition for publishing?

• Two trends have accelerated the recent global pattern of growth in outsourcing:
  • the shortages of technology labour in the late-1990s;

  • the economic downturn in the early 2000s.

• Technology services and experience in the supply market make broader outsourcing an increasingly viable proposition for publishers. Lately all the cards seem to be aligned in favour - global telecoms costs are falling, the internet makes communications and data exchange easier and the presence of skilled publishing process and support workers in many overseas locations means the cost of doing business is very much lower; publishing supply companies in offshore locations are correspondingly growing in size and offer a wider range of low cost services.

• This report looks at the potential next wave of outsourcing, which includes outsourcing whole teams and processes, as well as some of the infrastructure to support them.

Outsourcing strategies

• Outsourcing requires a strategic approach to operational planning; outsourcing decisions should never be tactical reactions to short-term pressures. Outsourcing represents a fundamental shift in operations, which cannot be quickly or easily reversed -- and it requires well-considered, detailed, costed and mitigated planning.

• Most publishers balance an outsourcing strategy with three main factors in mind:
  • what are the primary drivers - cost, flexibility or other?

  • what is feasible - both in terms of supplier services and organisational capability?

  • what are your core activities and processes, and should all else should be considered for outsourcing?

What to outsource?

• outsourcing services suppliers are now offering specific publisher-focused services, as well as traditional back-office processes, including:
  • editorial processes particularly where teams of in house writers are required;

  • specialised transcription services e.g. for medical or legal publishing;

  • design and page layout particularly for templated products;

  • advertising sales and ad. management;

  • production process management;

  • publishing technology development and system hosting;

  • multi-media content reformatting and re-presentation;

  • web sites and further in roads into online publishing development.

• Whereas in the past publishers have tended to develop and maintain systems to support finance, production, editorial and design workflow, content management and business intelligence systems, all of these are feasibly available from service providers using the web as a key enabler.

Where to outsource?

• While India is the leading global location for outsourced services, and commands as much as 60% of the all industry global market, there are many places for publishers to look for opportunities, such as:
  • Malaysia - highly-rated for quality and skills;

  • Vietnam and Cambodia - currently among the lowest in terms of cost;

  • Singapore - not the cheapest location but an excellent front end for managing extended outsourcing across the Far East;

  • Argentina - especially where time zone compatibility with the US and Spanish language skills are pluses;

  • Eastern Europe - particularly Romania and Poland (Krakow for example is becoming a leading centre for personnel services, whereas Budapest is a growing centre for finance and operations outsourcing);

  • South Africa - particularly beneficial for time-zone compatibility with the UK.