Many would argue that getting rid of the middle man is the way of the future, but a newspaper has more brand recognition and still gets more eyeballs. The problem facing them right now is how to convert the readership into an effective revenue stream.

Most newspapers already have Twitter accounts and Facebook pages, and have had them for some time now. These accounts have quite a few followers and fans. The main concern is accurate calculation of the return on investment (RoI) in social media so that they can convince their advertisers to come back. One method to measure RoI is through tracking the click-through from the respective social media accounts and pages. Another method is to use social media to sell advertising space. Some newspapers are already exploring this avenue to generate more revenue.

One such newspaper is the Austin Statesman. Advertisers looking to tap into the Twitter follower base of the Statesman can do so. Mingled within the tweets of their twitter account, which include tweets on the local happenings in Austin, TX, and replies to their followers are advertisements from local businesses. The tweeted ads are distinguished by the hashtag ‘ad’, and it doesn’t look as if the newspaper has lost many followers over its decision to incorporate advertisements into its Twitter account. This probably has to do with the fact that each advertiser only gets two tweets in a day, one in the morning, and one in the afternoon, and that the paper has strict guidelines on what gets tweeted and how.

Another newspaper experimenting with generating ad sales in social media is the Wall Street Journal. In Sept 2011, they released their WSJ Social app on Facebook.  Since the advertisements appear in the app itself, and not on the Wall, it doesn’t violate Facebook’s policy. WSJ uses space within the app to advertise, and Facebook uses the right-hand side column to showcase its sponsored posts. Furthermore, readers are able to read articles written by the favored editors without navigating away from Facebook to the WSJ’s website.

For every newspaper trying to monetize its social media presence there are hundreds who are not. Social media outsourcing doubled from 14 percent in 2010 to 28 percent in 2011. Of all the tasks that marketers outsourced, design/development, analytics and content creation comprised the top three (Social Media Examiner, 2011). If a newspaper is already outsourcing its digital content production, it could leverage its service provider’s capabilities to create a Facebook app and sell advertising space there. Tweeting ad images is a viable alternative for advertising through Twitter accounts. To such effect, service providers, who serve newspaper publications, need to anticipate their client’s needs, and ramp-up their skill set to provide such services.

I believe that social media can be effectively used as a source of revenue for newspapers, as long as they don’t turn their accounts into one giant billboard space.

- Deepti Krishnan, Analyst, Sourcing Practice

This holiday season, consumers are looking at buying and gifting another transformational format for the media and entertainment industry – the e-book. With the foundation being built slowly over the past two years, the e-book industry is now unleashing its full marketing potential to convince tablet owners to make the “digital switch” from traditional hard covers and paperbacks to its electronic form. Amazon and B&N have already established their proprietary e-book formats and dozens of other publishers are getting on-board to digitize their output.

This has spelled a boon for publishing outsourcing companies who are experiencing a record boom in demand for services such as digital publishing, document conversion, electronic publishing and online content services. The major market for these services includes, not only fiction and non-fiction work, but extends to the highly lucrative academic and text book markets.

My alma mater, the Michigan State University, too has joined the digital bandwagon, with their Environmental Stewardship Initiative gathering interest and building demand for students to make the switch to digital courseware. Digital formats will be a huge breakthrough for reducing paper waste and as a student, I would prefer loading all my e-texts onto a compact tablet rather than lugging around a bunch of heavy text books. Pricing, however, remains a challenge with administrators and students alike, and will most likely be the deciding factor to make the change to digital a success.

As a lighter, festive note, I would like to wish “Happy Holidays” to each and every one of you, while I go ahead and browse through and gift a few e-books to my friends and family.

– Guest post by Ashmita Gupta, Research Analyst, ValueNotes

Our recently released report on outsourcing in the utilities space predicted a “data deluge” of sorts with the amount of information generated from smart meters attached to every home. All this information will be sent along the grid to the utility for analysis and billing purposes. To prevent misuse of this data, utilities service providers, meter/grid component manufacturers and the utility companies are collaborating with regulators such as the US Federal Energy Regulatory Commission (FERC) and UK’s Ofgem to address security concerns and strengthen the smart grid itself through more effective security solutions.

From the consumer’s point of view, security means that the data collected from each home does not get leaked or hacked along the way and the only destination is the utility. This data has to traverse through multiple data nodes on its journey from home to the utility, thus posing many points for potential hacking. Industry experts and outsourcing solution providers are working hard to increase levels of security and improve privacy control standards as the roll-out is happening on a global scale. A recent news item pointed to the fact that a European engineering firm detected minor attacks targeting grids in the region and some others may actually have gone undetected.

What can we expect in the future for the industry and outsourcing in this space? We believe that cyber-security threats will increase, which will act as a driver for more investment and research focusing on reliability and threat assessment solutions. Smart meter usage will start to peak in 2012, resulting in a huge demand for analytics solutions from the industry.

- Sameer Murdeshwar, Analyst, Sourcing Practice

ValueNotes and Anunta in a recent study found that CIO/CTOs  of the banking and financial sector feel the need to improve their IT performance. However, they do not consider service level agreements important. SLAs are treated as compliance and not as an integral part of IT operations.

The study found that 21% of IT heads do not have defined SLAs around their IT applications. Among the remaining 79% who do have SLAs in place, not everyone is measuring or monitoring them.

The Head-IT of a health insurance company said that, “Measuring performance of vendors is important, but I have to admit that the SLAs are more on paper.”

The common reasons for not measuring the SLAs can be summarized as below:

1. Failure to measure:  The IT teams in banking and financial sectors are unable to correlate the application metrics to business objectives. The IT teams are unsure which SLAs to adopt especially when the business needs change.
2. Failure to redefine: Technology is changing at very rapid pace. The IT teams of banking and financial sector are unable to refine and rework the metrics and invest in new application delivery management tools and infrastructure.
3. Failure to understand the importance: Many organizations in the banking and financial sector are aware about the requirement of SLAs, but fail to understand the impact it has on their business.

Defining SLAs helps to monitor the levels of performance as promised. It is critical for banks and financial institutions to measure and refine SLAs on a continuous basis. After all the non-performing applications could mean dissatisfied end-users, erosion of brand image and most importantly, lower revenues and higher costs.

To download a complimentary copy of the white paper, “State of application performance management in the Indian BFSI sector”, please follow this link

– Guest post by Shilpa Eguvanti, Team Lead, ValueNotes

• Contracts may need up to 5-10 drafts by conservative estimates
• Contracts may need up to a year to finalize
• Contract values range from USD 10 – 1,000 million
• Hundreds of types of contracts
• Legal team sizes ranging from 6 – 1000+
• More than 40 countries across which contracts are managed by a single firm

These are the kind of numbers that some corporates and law firms have to manage when it comes to contracts. And they are quite candid too when it comes to saying how they do it. Sample these responses –

• “Far too many to categorize”
• “There is no single contract process, it depends on the client and type of contract and industry we have multiple processes and methods. Too detailed to discus.”

This isn’t to say that all corporates and law firms are at sea, many have over the years managed to put in place processes and use technology to streamline; but they all can definitely do with some help. Legal contract outsourcing does just that. There are many companies and law firms that are already outsourcing. Law firms do provide legal services, but they are an expensive option; leading many companies to look for other options such as the LPOs.

The most important input to contract outsourcing is the time spent right at the start of the engagement, so that the buyers and the service providers are on one page about deliverables. As one service provider mentioned, “The biggest challenge is working with the client to understand how they are going to use the information – what they really need and how they are going to use it. That is the hardest part. Most of the energy needs to be spent upfront to identify what is important in terms of information they want coming out of the contacts.”

Considering the service providers’ ability to offer various options to the buyer community, which not only includes a mix of service, but also technology, the complete solution offers faster turnaround, improved quality and lower costs. The service providers understand the importance that companies attach to onshore delivery and subject matter experts’ presence, and are taking steps to ensure that they are able to offer the right mix of resources.

To read more about this subject, look out for our report, “Contract Outsourcing: Do buyers get what they want?” releasing this month.

Technology advancement leads to job cuts in the US

While gathering insights for my report, I also came across several concerned members from the US medical transcription industry, mostly freelancers, who were losing work as a result of speech recognition software (SRS). Though this technology has been around for quite a while now, it is beginning to gain momentum in light of recent regulatory changes. US healthcare providers (doctors either practicing individually or working in hospitals) use recording devices/ Dictaphones when ‘dictating’ a case, medical notes, observation, prognosis or patient history. This recording would then be manually typed out by the doctor or his support staff while filling out necessary medical forms (such as HIPAA compliant transfer to files). The task at hand was often tedious and looked at as a procedural addition to a physician’s already ‘overworked man hours’, thus leading to the popular practice of outsourcing. Technological developments have enabled transferring data to the file format via SRS, which converts spoken words into written text, cuts back human effort by as much as 90%. The software is often intuitive; uses open learning (improves accuracy with time). As an effect of this, many traditional transcriptions have far lesser work and some are even out of jobs or going out of business.

Is healthcare regulation intensifying layoffs?

The effect of healthcare regulation makes it compulsory for all US healthcare providers to implement EMR by October 2013. This process has accelerated the natural progression of technology and given the fact that many SRS can be integrated into EMR, traditional transcription and voice based volumes are likely to plummet in the near future, if not already so.

Some opponents of Obama’s healthcare act alleged that the healthcare regulations would lead to “roughly 650,000 jobs lost”. This estimate was based on a report that actually stated – “The Congressional Budget Office (CBO) estimates that the legislation, on net, will reduce the amount of labor used in the economy by a small amount—roughly half a percent—primarily by reducing the amount of labor that workers choose to supply. That net effect reflects changes in incentives in the labor market that operate in both directions: Some provisions of the legislation will discourage people from working more hours or entering the workforce, and other provisions will encourage them to work more. Moreover, many people will be unaffected by those provisions and will face the same incentives regarding work as they do under current law.” Which, simply put, means that some reduction will be seen in man hours, but not an actual reduction or killing of jobs. It is true that the legislation’s other provisions such as ‘greater accountability’ and reducing medical loss ratios (MLRs), will lead to a more streamlined process and will most likely result in increased outsourcing to cut back costs and improve efficiencies.

Increased healthcare opportunities across US and global outsourcing

The use of EMR, and its mandatory compliance in the next couple of years, will in fact create an increased demand for healthcare professionals. There are considerable opportunities for coding conversions as a result of ICD 9-10 conversions, healthcare IT consultancy for EMR implementation and certification. The healthcare outsourcing industry stands to profit – IT/BPOs can capitalize on the significant opportunity by helping healthcare providers implement and manage electronic medical records and technology upgrades. RCM vendors can increase their footprint in the already expanding revenue cycle management and healthcare KPO service areas, including patient data management and healthcare analytics.

Read our latest report on this topic to know more about healthcare opportunities

(PS: I pointed the person who had put up the post to a national centre that offered online courses –  who wrote back expressing that they would sign up for some of these courses.)

The MRO industry in India, like many others, was adversely affected by the recession. As companies slashed budgets for research activities altogether, outsourcing suffered by association. However, even though overall demand shrank, the drivers for outsourcing were strong enough to sustain the market. The emphasis on lower costs and higher quality strengthened with the recession. The MRO industry today is slowly recovering, but in an increasingly competitive post-recession market, the importance of technology has only increased.

Providers must remain up to date as the tools and technology in use are rapidly changing.  The last few years have seen the use of innovative new methods of data collection including online research communities, discussion forums, blogs and other cross-platform media. Social media, particularly sites like Facebook, Twitter and Linkedin, are now commonly used for market research. MR companies find these sites effective mediums for getting fairly unbiased consumer opinions. Social media market research has not caught on in a big way in India as yet and there exists good opportunity for developing technology and processes that can track consumer sentiments on blogs and social networking sites on a regular basis.

Technology is not only believed to be a differentiator, but is also a major determinant in service provider selection. MR companies outsourcing work prefer to work with providers that possess and utilize the technology they use as it eliminates training costs as well as time spent in converting data files. Additonally the effective use of tools and technology demonstrates the analytical and technical prowess of a company. Investment in good technology can provide a huge competitive advantage to service providers in the market research outsourcing business.

- Guest post by Krutika Ravishankar, Research Analyst, ValueNotes

Image courtesy: www.smartcommunityfife.org.uk

To define marketing analytics, let’s take a look at these two terms separately –

Marketing – The real meaning of marketing is to bring products/services that customers value depending on their needs and wants, met and unmet. Marketers need to establish a market for these products/services, build awareness (and the need to buy) among customers and build relationships with them after making the sales. This way, it’s a win-win situation for both the marketer and the customer with sales targets being met and the customers getting the product/service of their choice. It all sounds good on paper – In the real world, there are so many obstacles towards implementing these concepts such as – defining the market, communication channels, building trust, etc.

These variables, dependent and independent, can cause a lot of confusion for marketers. The need then arises for tools to help them with effective decision making capabilities – actionable intelligence, is what they really need.

Analytics – With so many considerations to make an effective decision, analytics is a powerful tool which can be used to arrive at an informed decision after investigating and “making sense” of all the unstructured data available to the marketer. The key is to find insightful information from all possible data (qualitative and quantitative). There are elements of judgment and circumstance in this decision making process, which brings in a small amount of uncertainty.

If we combine these two terms, we get a specific, niche service aimed at investigating facts and data to arrive at realistic and optimal marketing decisions. An analyst in this field needs to have knowledge in many areas such as statistics, sociology, psychology, and communications, coupled with extensive market information. Being able to filter, mine, present and synthesize data is a must for the end-reader to be able to act upon the findings. As a function, there are several marketing activities such as web analytics, social media, content creation, campaign tracking and PR which would benefit from analytical rigor.

To meet the growing needs from the industry, service providers in this space are working in partnership with sales and marketing departments worldwide to fine-tune marketing analytics as a viable and long-term process. As a practice, these capabilities cannot be acquired or mastered over a short period of time. Emerging offerings within marketing analytics include marketing measurement, cross-sell/upsell analysis, loyalty customer lifetime modeling, and churn/retention analysis.  With regular collaboration between marketers and analysts in outsourcing firms, we can expect a clearer, more structured form of marketing analytics in the near future.

- Sameer Murdeshwar, Analyst, Sourcing Practice

A primary reason for Thomson Reuters’s acquisition of Pangea3 and UnitedLex’s of Lawscribe in late 2010, in my mind, was to meet growing demands by organizations and law firms alike to cut costs and increase process efficiencies. These acquisitions saw these market heavyweights expand their businesses, core strengths and the ability to offer clients additional solutions. The market is primarily serviced by pure-play providers, like CPA Global, Pangea3, UnitedLex and Mindcrest, who offer legal services as their core focus. The last 2-3 years has seen IT-BPO players entering the market to add to their top line and expand into new service areas. Their only competition is from these large pure-play providers who have established themselves globally because of their head start.

IT-BPO service providers have a number of elements that could make them contenders in this fiercely competitive space. The first and key aspect is their brand. Having been in the outsourcing space for numerous years and establishing themselves as competent and innovative should be grounds enough to acquire clients upon introduction of their LPO arm. Cross-selling to existing clients who might have legal needs should eliminate them having to go back to the drawing board for marketing themselves. Having an onshore presence through existing delivery/marketing locations will also enable them to provide onsite delivery options and client interactions. Existing technology expertise will also pay dividends for IT-BPO players. The role of technology has become crucial as an integral function for any LPO service provider, not only for the delivery of legal services, but internally as well, to monitor workflow and maintain data security.

This isn’t to say that venturing into LPO is going to be a cakewalk for IT-BPO players. Where they do need to play catch up is talent acquisition within their legal service offering. The type of talent they recruit and the experience they bring on board will be a strong determinant in how successful of a player they will be. For this they will now have to start targeting law graduates and individuals with a legal background and expertise; a different direction to their current recruitment strategy. Going hand in hand with recruitment is training; essential in ensuring employees are on a common platform and aware of their client needs and business environment.

I feel IT-BPO players such as, Infosys, Wipro, WNS, and EXL (who already have LPO arms) are a couple of years away from offering the pure-plays any real competition. A Pangea3 or UnitedLex has the domain knowledge, employee strength, onshore capabilities and credentials, having been the forerunners and setting the precedence for others to follow. Being a ‘tried and tested’ option continues to give pure-plays the upper hand in this space. But don’t write the new guys off just yet. Given time and opportunity, pure-plays will most definitely see IT-BPOs competing for the same contracts, and then some.

These are some of the salient findings from our research on the state of digitization in the publishing world. The publishing industry underwent some drastic changes in the last couple of years – because of the global economic crisis and also, because of the rise of the digital market. This phase is also quite exciting. The report, sponsored by Qbend, has provided us with comprehensive insights on various aspects on how publishers are addressing the digital market. Based on over 200 responses from professionals working in the publishing industry, this report talks about the production, distribution, digital rights management and pricing of digital content.

I would also like to take this opportunity to announce the release of our report. The report titled ‘The Current State of Digital Content’ is available for download. [Download here]

Why should you download this report?

The digital market is still in its nascent stage. While the publishing industry has addressed more pressing issues (such as production issues), several aspects of the market still need to mature. This report provides insights into what publishers are currently doing and what they expect in the near term. The research will help publishing professionals from the STM/Academic, education, magazine, and trade book segment better understand the digital content market.

Key research findings indicate that:

• 4 in 5 survey respondents have indicated the production of print and digital content
• 60% of survey respondents have indicated that prices of digital content are 25% cheaper than print prices
• 25% of revenue contribution from the digital market for most of the publishers
• Strain on resources and lack of in-house expertise are significant challenge while producing digital content
• Most publishers are moving to a universal file format – one that is supported by most reading devices
• More than 80% of survey respondents are outsourcing or planning to outsource pre-press services
• Of those outsourcing, conversion (of content to various formats) has emerged as a high demand service
• India remains a preferred outsourcing destination, closely followed by the US
• Most publishers prefer third party digital bookstores/channels in addition to in-house bookstores and applications on reading devices while distributing their digital content

If you have any questions or comments about this report, do feel free to write to me at jui@valuenotes.co.in