Publishing: India remains top outsourcing destination

Chennai/Bangalore: India remains the destination of choice for content, design, media distribution and other outsourced publishing work. Sixty-six per cent of respondents in a recent publishing survey said they would prefer to outsource publishing and pre-press work to India over competitors like the US, UK, China, Australia and the Phillippines.

The survey conducted by research firm Valuenotes Database among 237 publishers, consultants and service providers, largely from the US and UK, notes that India remains a favoured publishing sourcing destination with 66 per cent of the respondents rooting for it. India was followed by the US with 30 per cent, the Phillippines (18 per cent), UK and China (16 per cent each), Vietnam (8 per cent) and Australia (5 per cent), with the remaining 18 per cent in favour of other upcoming destinations.

Rakhi Vig, manager – product sales with Valuenotes Database, said the increasing costs of production and print, coupled with the global economic slowdown, has led to the industry struggling to address the increasing demand of digital content as opposed to print. “Over the past few months, we have seen publishers trying a variety of approaches – going digital, reducing print publishing, and cutting costs. In spite of these measures, one thing comes across very strongly – the industry is yet to find that one formula that addresses all its problems,” she said.

Some 64 per cent of the publishing buyers (companies outsourcing publishing work) have been outsourcing different aspects of their work, and would continue to do so, the survey said. Eight per cent of the companies are not outsourcing at present, but are considering the possibility, while another 8 per cent said they were outsourcing some aspects of their work, but intended to stop the practice soon. Five per cent of the respondents were unsure about whether to outsource, while the remaining 15 per cent definitely had no plans to outsource.

“Sixty-four per cent of the respondents still have faith in their vendors,” Vig said. Cost pressures and capability constraints continue to be the key drivers for outsourcing. However, in some cases, outsourcing has put additional pressure on inhouse teams to spend more resources on evaluating the outsourced work, the survey said.

Roughly 40 per cent of the buyers surveyed were looking at cost savings in the range of 15-25 per cent, while service providers on the other hand, perceived higher savings in the range of 25-40 per cent — suggesting at least on paper that buyer expectations are yet to match the high degree of vendor confidence.

“Yes, there is a misalignment in buyer expectations versus service provider perceptions. Providers need to ensure that the buyer understands the difference between provider-end cost savings and actual cost savings. Buyers need to account for project management and inhouse quality checks. They need to give their vendors time for costs to go down as productivity and efficiency kick in,” Vig said.

About 19 per cent of the buyers surveyed expressed high satisfaction with the quality of services rendered, while 62 per cent expressed medium satisfaction. Low satisfaction rates were at 19 per cent, according to the survey.

Regardless of the upbeat perceptions of service providers looking to bag more publishing deals, 75 per cent of the buyer profile made it clear that considerable improvements are required in service delivery, while 58 per cent felt that quality of service requires drastic improvement.

Forty-two per cent of the companies surveyed plan to increase outsourcing by 25 per cent, while 33 per cent will continue to outsource at the present levels.

“Even though 16 per cent of the companies surveyed did not approve of outsourcing, the overall publishing outsourcing market is still set to increase 15-20 per cent,” the survey said.

Source : Business Standard. 28/01/10

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