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The yin-yang of publishing outsourcing

November 12, 2009, 5:23 pm

Margin pressures are a sign of maturity (and commoditization) in any services industry. Publishing outsourcing is no different. Low entry barriers have kept the wannabes pouring in, relentlessly setting up shop, offering ridiculously low prices … to a point where it won’t work any further. However, that hasn’t stopped any more wannabes from joining the game.

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!

Last 5 posts by Aradhana

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Category: Mergers and Acquisitions, Publishing Industry, Publishing outsourcing, Publishing Practice  |  Comment (RSS)  |  Trackback
  • http://www.virtualpaper.co.in K. Venkatesh

    I think Indian services industry is slowly moving away from labor arbitrage (nobody positions services industry in India in terms of labor arbitrage benefits but it is only included as one of the attractive factors for outsourcing to India) to value-added, niche services. The IT industry, for example, moved largely to consulting roles when software development that led to a deluge of outsourcing had competitive pressures in terms of cost.

    The publishing services industry is also moving to niche roles and also keeping up with the latest trends in publishing. If the ebooks become a rage as it is projected to be (176% jump in sales year on year), service providers in India will be the first to provide ebook solutions. Already over the years, e-publishing BPO companies have moved up the value chain from simple typesetting to project management now. More publisher functions are likely to be outsourced not only to cut costs (which is the primary motive for publishers to move work offshore) but to get services under one roof and getting away from managing functions that require expertise. Expertise will be supplied by service providers. The industry is now at a strategic inflection point where more services will be added to the portfolio and publishers will largely depend on service providers to succeed in their plans.

  • http://www.typefi.com Chris Hausler

    At Typefi we have seen an uptick of publishers looking to automate some of what they have outsourced, especially as it relates to composition. With the necessity of outputting to multiple sources the delays and roller-coaster ride of prices and quality have pushed some to have an XML first workflow which enables them to output to print, web and ePub without delays. There are now tools available that alleviate the “pain” of everyone having to become XML experts or programmers to write code to flow content from XML into products like InDesign Server. This gives control to the right people, editors/authors for content and designers for design. It also brings them together because there is instant feedback, not days or weeks of waiting.

  • Abhijit Joarder

    Outsourcing is a good option to get multiple platforms of digital data of their hard copy, digital format as well as Print on Demand Format, so no need to run for printing press, new edition just modify the application files and produce a new edition of your existing copy. I think XML is a good format to store your data in raw format and it is also useful for Digital and Print Media.

  • Pradip Kumar Ramaswamy

    The new buzz word going around in the BPO world is the creation of “Platform Based- BPO” and this will be the solution to the Publishing industry too. Major investments are being made by the top 5 consulting companies from India. The Platform based BPO has also been talked about by analysts as the next wave that will boost the BPO industry. The focus on this is to automate as much as possible and have a platform in which multiple client processes can be plugged in at various stages to get the end output!! The platform BPO has been developed and deployed in a couple of areas and has demonstrated huge savings. The publishing processes too lend themselves very well for these type of service and would be the answer for future. This will move us to the next league and help us capitalize the market. Also one great thing that will happen in this is that the really small time operators will have to pack off because of the investments that this would require.

  • Aradhana

    Venkatesh, I agree that publisher functions will increasingly be outsourced not only to cut costs but to get services under one roof…
    We are already seeing a trend of vendor consolidation which is set to grow – as a result stronger vendors will thrive while weaker guys (wannabes: replicating big guys, with no differentiation) will get pushed out of business.

    Aradhana

  • Aradhana

    Pradeep,
    Platform-based services to the publishing industry is likely to create the “next” wave in offshore publishing BPO, especially if the established IT services leaders decide to take the serious plunge… This will lead to greater consolidation, and yes I agree the smaller guys without the investment capability or the niche content capability will bite the dust… However the publishing industry is huge.. there is a lot beyond the Top 5 and a lot beyond the traditionally focused US/UK markets. The smaller guys will need to train their focus on niche areas/opportunities while staying off the biggies’ turf.

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