The publishing BPO industry is becoming increasingly competitive as vendors rapidly climb the maturity curve. Rising investor interest in the sector, a widening of the scope of offshoreable services, rapid ramp-up of several large and small players and the coming together of vendors in a recent conference on Publishing BPO Services organized by CII in Chennai - all these are an indication of the changing face of the publishing BPO industry.

The coming together of vendors is a significant move towards strengthening the industry, and is likely to translate into greater co-operation, pooling of marketing/PR efforts, time and money to promote 'publishing outsourcing industry', and joint focus on practical problems such as capacity of employable talent, training and anti-poaching contracts.

Publishing BPO industry - Growth and Challenges

Revenues from the publishing BPO industry stand at $440 m as of 2006 and are expected to reach $1.46 b by 2010. The current growth rates (estimated by ValueNotes at 35% till 2010) in publishing offshoring are promising, and provide significant opportunity. However, to sustain growth and profitability, vendors will have to identify and deal with numerous challenges.

The recent conference in Chennai provided a platform for various experts from the industry to exchange ideas and best practices. The intention was also to bring better visibility to the industry, and thereby attract talent. Vendors also requested organizations like the CII and NASSCOM to lobby with the government for extension of the STPI scheme. In addition, they asked for support in introducing a "publishing BPO" curriculum either as a separate course or as part of existing curriculum.

Vendors also discussed some of their worries - the recession in the global economy, the appreciating rupee and the emergence of new media. Sriram Subramanya, CEO and MD, Integra said that "The publisher expectations are also increasing in terms of speed to market, consistent quality, end to end services, reduced pricing, multiple & complex deliverables, need to deal with fewer suppliers etc. There is an increasing demand supply gap on the manpower side as well combined with high attrition & increasing costs."
Vinay Singh, CEO, Thomson Digital said that attrition and cultural differences are the two immediate concerns for vendors. S Vellayan, Managing Director, Laserwords pointed out that while attrition is not specific to the publishing BPO industry alone, it is an issue that every vendor has to deal with in their own way.

Bridging the Industry - Academia Gap

Despite the large number of graduates and post-graduates, the 'quality' of talent available has been the main cause of concern for recruiters, as is the case for most employers in India today.

With the Indian economy flourishing, graduates and post-graduates have plenty of career alternatives that offer attractive salaries and perks. Moreover, fresh graduates are usually not equipped with specific publishing related skills, and have to undergo a longer training period. Anu Sriram, Co-founder and JMD, Integra pointed out that while talent is available in plenty, the industry and academia should together address the question of how to create 'industry ready' talent.

While several universities are offering courses on e-publishing, industry executives urged academia to consider revising and standardizing courses tailored to suit the immediate requirements of the industry. The academicians argued that they could produce 'employable' talent, only with co-operation from the industry. The academia believes that one way could be via greater exposure to prospective recruits on live assignments with publishing BPOs.

Either way, the fact that BPOs are engaging with universities and educational establishments is a positive development. A long-held grouse about our educational system has been it's irrelevance to the workplace. And because we have invariably waited for the government machinery to fix this, not much has changed. In this context, the attempts by BPO publishing vendors are a sign of their growing maturity.

Shifting Focus - More Alternatives emerge

The Indian publishing BPO services began with providing services for the STM segment, where significant maturity has been built over the last decade. While the opportunity within the STM market itself is enormous, vendors will increasingly tap newer markets such as educational, newspapers, yellow pages, magazines and B2B publishing, which have a significant offshore potential.

Further, with the maturing vendor capabilities, there is also an impending need to invest in technology to be able to offer value added services. Neeraj Malhotra, Sr. Vice President, Macmillan Publishing Solutions, talked about mobile and other emerging technologies that will change the publishing BPO industry.

So far, Indian outsourcing (especially in the STM market) rode the value proposition of significant labor cost savings. However, going forward, value addition will become the primary driver for offshoring in the emerging segments like testing and assessment and K to 12 segments.

In fact, the STM market accounts for a mere 6% of the global publishing industry, while over 70% of India's publishing BPO revenues come from this segment. This indicates the huge opportunity beyond the "professional" publishing market. However, it is only in the last few years, that these new markets have caught the attention of the mainstream of Indian vendors.

With companies charting aggressive growth plans coupled with innovative strategies to face challenges, we believe India's publishing BPO industry is set on a fairly robust growth trajectory. The real challenges will be related to whether companies can rise to the "next" level of maturity, implying the ability to scale, build geographically dispersed delivery capabilities, diversify offerings and manage all this effectively. In other words, can they build sustainable and sizeable corporations - as IT leaders such as TCS, Infy and Wipro have done?