While this phenomenon on one side of the industry spectrum has led to rapid commoditization of services, it has also galvanized creativity amongst players on the other side. Innovations in productivity enhancements, process refinement and proprietary product development has become the new mantra for industry leaders, in order to stay in a profitable game. Today, prices have dropped to levels that have pushed struggling players out of business, while the larger players are desperately seeking opportunities to grow.

As a consequence, publishers negotiate the lowest possible prices, with the availability of a large pool of cheaply-priced suppliers to choose from.  For the more discerning customers, the wannabes have in fact helped create differentiators for the stronger players. Industry leaders have now begun to position themselves as sustainable, technologically suave partners in business for publishers.

Over the years, the commoditization-innovation cycles driven by the two forces in the industry have helped set new standards and redefine focus in publishing outsourcing. So, can we say that the wannabes are a necessary evil for sustenance (and growth) of the industry? Arguably, yes – like the yin and yang elements in nature, the two essential forces in the industry will always need to coexist!

Some of the recent acquisitions include:

• Laserwords’ acquisition of US-based Four Lakes Colorgraphics
• diacriTech’s acquisition of LaurelTech Integrated Publishing Solutions, specializing in El-hi, College and Professional publication areas.
• S4 Ind’s partnership/merger with Carlisle Publishing Services to gain entry in the educational, trade and publishing segments

Of course, not all past acquisitions by large vendors in the outsourcing industry have been successful. This is not merely because of fitment issues in terms of size and capability, but also because handling employee integration issues across borders – cultural or otherwise, is a challenge. The resentment associated with job losses (as a means to remove redundancies) within the acquired company and low morale often lead to limited success in larger (and hasty) acquisitions.

Acquisitions targeted at smaller overseas companies that have niche capabilities – developmental editing, designing, etc. with an attractive client pool could prove more beneficial for offshore vendors. The investment in such companies is likely to yield faster and better ROI, at least in the near-term. Minimal to nil job losses would create a healthier climate for integration. Instant addition of an otherwise capability lacuna on home turf enables the vendor to capitalize on high-value opportunities much faster.