The Indian publishing BPO landscape has evolved in terms of technology, service depth, maturity and developed capability. The industry has also witnessed the percolation of technology – in terms of adoption and delivery. With many acquisitions overseas, publishing BPOs now have the capacity and the capabilities to address almost every publisher’s needs. However, the industry is undergoing vendor consolidation and this has resulted in changes in the client mix.

Buyers are consolidating their respective offshore/onshore service provider base; to streamline workflow, get better pricing and ensure stability in delivery of services. Traditionally, buyers in the publishing industry have been sourcing work from multiple vendors depending on the specific publication, pricing and the degree of skill and capability for a particular need. However, buyers are now looking to consolidate their vendors, that is, source from fewer vendors to leverage volumes for better pricing and reduce overhead costs for project management.

These were some of the points discussed at the executive briefing conducted by ValueNotes. The session held at the GRT Radisson, Chennai on Friday, 26th June 2009, saw attendance from senior executives and representatives from service providers such as HOV Services, PreMedia Global, TexTech International, 2AdPro, Amnet, CenzaTech, S4Carlisle and Virtual Paper.

The event started off with a presentation on key findings and trends in the publishing offshoring industry. This was followed by a panel discussion centered on the future outlook of the industry. The discussion brought to light significant issues and challenges faced by the service providers. Several issues were bought up particularly the ongoing vendor consolidation and price re-negotiations. Discussions also touched themes such as the current business climate, buyer expectations, leveraging onshore presence, shrinking margins etc.

Speaking about vendor consolidation, Prema Ramalingam, COO, TexTech International, said, “Operations of scale, niche and those of end-to-end services remain safe. The biggest publishers have consolidated their vendor base. This is not to say that the publishing offshoring industry will see many players shutting shop. They can still continue operations by bringing smaller or medium scale publishers in their client mix.” Added Nandakumar Ramchandran, VP- Business Development, S4Carlisle, “Publishers are essentially giving the same work to the same vendor. What has changed is the number of vendors servicing the big publishers – there are now around 15 companies that service these publishers. Marketing is one aspect that needs to be stressed on. Ensuring visibility of service offerings will ensure survival.”

With over 140 service providers in the industry, the publishing offshoring industry will go beyond the traditional outsourcers of publishing work. New segments such as magazines and newspapers will open up to outsourcing and these represent significant opportunities to service providers. Some service providers have already branched off to peripheral industries such as IT services and products. Looking beyond traditional markets such as the US and the UK, service providers have also started addressing English speaking, non native and non English markets.

However, with an industry that is changing fast, management and leadership is one aspect that was mentioned repeatedly. Neeraj Malhotra VP - India Operations, PreMedia Global, said “It’s not only vendor consolidation that is taking place, there is also publishing consolidation. Sustainability is becoming a problem and across the industry, profit margins have shrunk. Leadership is crucial – knowing when to maintain the status quo, invest or get funding is critical.”

While there has been a trend wherein service providers have acquired publishing BPOs to increase their market presence in the US and UK, Ashish Agarwal, CEO, Amnet Systems, said “This is the right time for companies to merge – capitalize on synergies. But doing so requires tremendous vision from the management. Having the right vision helps integrate companies and leverages their capabilities and value faster.”

The current economic condition notwithstanding, the publishing BPO industry is set to grow. India continues to hold the largest share of offshored publishing services, contributing $660 m to the total $780 m worth of total offshoring revenues from Asian countries (India, Philippines, Sri Lanka, Vietnam and China). The STM/Academic, educational and legal publishing form the bulk of offshoring to India, with traction in other segments such as magazines, corporate/B2B publishing, etc.

The publishing offshoring industry is following a high growth path – to be driven mostly by new segments such as magazines, newspapers and the need to digitize. However, there are still issues that service providers need to address. In light of the ongoing vendor consolidation, service providers need to go beyond traditional outsourcers and include more publishers in their client mix. There will be a strong demand to innovate, define processes and productize their offerings. Ensuring sustained growth and operations will require focus on marketing to enter new segments, services and markets. Most importantly, there would be increased emphasis on management and leadership – a clear vision to drive the industry to new heights.