The publishing industry has yet to devise a formula that can be replicated across segments and guarantee sustainability at the same time. The uncertainty in the industry prompted us to wonder – will publishers outsource? Some publishers are already outsourcing but will they outsource more? Will they offshore? What are the primary drivers for outsourcing?

In order to get more clarity on where the industry is heading, we ran a survey. The responses we gathered have provided us with strong insights and form the basis for analysis on where the outsourcing industry is heading.

Who took the survey?

With 237 responses, our survey included:

• Buyers, industry trackers and sellers
• Respondents across diverse markets such as US,UK, Europe, Asia, etc
• Respondents varied as per company size and revenues (small to large)
• Companies operating in diverse segments (STM/Academic, magazines, newspapers, education, books, etc)

A diverse respondent base such as this allowed us to cross tab and analyze various aspects of buyer responses. Among these aspects,  some of the key ones:

• There exists a disparity in cost savings – buyer expected savings versus seller projected savings
• Almost three fourths of the buyers are not satisfied while outsourcing

The cause of poor satisfaction levels while outsourcing stems from the buyer’s need to closely monitor the work. Outsourced work, more often than not, requires to be fixed in-house. In addition, buyers need to invest resources that ensure that the adequate quality and standards are met. This has emerged as a major pain area for buyers. While lower satisfaction levels can be attributed to relatively new outsourcing segments, is it indicative of traditional outsourcing segments such as STM/Academic publishing?

Satisfaction levels of buyers while outsourcing STM/Academic work

The STM/Academic publishers have been the avant-garde of outsourcing in the publishing industry. The segment has been outsourcing and offshoring since the last two decades. It is therefore that this segment represents a mature outsourcing market. However, our survey responses suggest otherwise. The exhibit below demonstrates the satisfaction levels of publishers outsourcing in the STM/Academic segment:

The satisfaction levels have still not peaked in this segment. Considering that outsourcing has been long associated with the STM/Academic segment, it is surprising to note that the industry is still aspiring for higher buyer satisfaction. This is probably an indication of higher expectations versus unsatisfactory delivery by the industry as a whole. Lower satisfaction levels also stem from buyers using smaller or fly by night operators as vendors. [More of this has been covered in our STM/Academic report – the first of a series of segment reports based on the survey data]

Other interesting insights from the survey:

• Cost pressures and value addition within current offerings present the strongest challenge
• Cost pressures and capability constraints are the strongest drivers for outsourcing
• Among the services being outsourced, buyers are keen to outsource content and production
• India remains a favoured outsourcing destination, followed by US, Philippines, China and UK
• Buyers expect savings in the range of 15-25% as against the 25-40% savings projected by most sellers
• Half of the buyers feel quality of work needs drastic improvement
• 16% of buyers do not approve of outsourcing

The publishing market is set to grow by 15-20%. Moreover, despite quality issues, 64% of buyers will continue outsourcing! There are silver linings despite the slowdown. Where will growth come from – which geography, service line, publisher type should be on the radar for service providers? The detailed survey reports provide greater insights on these.

We will be happy to share a copy of the summary of findings from this overall publishing industry survey. Please follow this link to download.

To find out more about the detailed reports click here.