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The Outsourcing Imperative for Publishers

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To cope with falling revenues and rising costs, publishers are looking to outsource their internal processes as part of their management strategy. This white paper seeks to address the problems of …

To cope with falling revenues and rising costs, publishers are looking to outsource their internal processes as part of their management strategy. This white paper seeks to address the problems of magazine and newspaper publishers looking to outsource ad production, but lack awareness, and want to know more about the return-on-investment (RoI) of outsourcing.


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  • 1. The Outsourcing Imperative for PublishersAugust 2012
  • 2. Table of contentsThe Outsourcing Imperative for Publishers ........................................................................... 1What do I do before outsourcing? .......................................................................................... 1 Outsourcability of functions ................................................................................................................... 2 Benchmarking performance .................................................................................................................. 3How do I select the right service provider? ........................................................................... 4How can I ensure a successful outsourcing relationship? ................................................... 5 Establish a water-tight SLA ................................................................................................................... 5 Transitioning to the service provider...................................................................................................... 7Am I getting RoI? ..................................................................................................................... 8 Return on Outsourcing .......................................................................................................................... 8Works cited ............................................................................................................................ 12About ValueNotes .................................................................................................................. 13iWhite paper | The Outsourcing Imperative for Publishers
  • 3. Table of exhibitsExhibit 1: Four questions to ask before outsourcing ................................................................................... 1Exhibit 2: Outsourcability matrix ................................................................................................................. 2Exhibit 3: Proclivity to outsource services ................................................................................................... 2Exhibit 4: Outsourcability of the advertising process .................................................................................. 3Exhibit 5: Performance measurement in ad production ............................................................................. 4Exhibit 6: Vendor selection criteria .............................................................................................................. 4Exhibit 7: Typical parameters in SLAs .......................................................................................................... 6Exhibit 8: Three stage transition process ..................................................................................................... 7Exhibit 9: Calculating return on investment ................................................................................................ 8Exhibit 10: Total Cost of Outsourcing .......................................................................................................... 9Exhibit 11: Calculating the tangible cost savings ......................................................................................... 9Exhibit 12: Benefit from faster time to market.......................................................................................... 10Exhibit 13: Costs and benefits of outsourcing relationship over 3 time periods ....................................... 10iiWhite paper | The Outsourcing Imperative for Publishers
  • 4. The Outsourcing Imperative for PublishersCirculation and advertising sales are the main revenue streams for publishers in the newspaper andmagazine business. An analysis of the latest circulation and advertising revenue totals for newspapersand magazines, released by the Newspaper Association of America and the Association of MagazineMedia, reveals the following: In 2010, ad sales contributed 71.4 percent to total revenue for magazine publications. 2011 saw a slight dip of 0.5 percent in ad sales. In 2009, ad sales constituted 73.2 percent of total revenue for newspaper publications. By 2011, ad sales in the newspaper industry had declined by 13.1 percent.To cope with falling revenues and rising costs, publishers are looking to outsource internal processes asa management strategy. But they make some common mistakes: Losing sight of the long-term strategic drivers for outsourcing Reaching a premature decision through an ill-defined selection process Lack of clarity on the final decision-maker responsibilitiesAdequate preparation before outsourcing may be the difference between long-term success andfailure. This white paper seeks to address the problems of magazine and newspaper publishers lookingto outsource ad production, but lack awareness, and want to know more about the return-on-investment (RoI) of outsourcing. Exhibit 1 below depicts the typical outsourcing process of a firm.Exhibit 1: Four questions to ask before outsourcing How can I ensure How do I select What do I do before a successful the right service Am I getting RoI? outsourcing? outsourcing provider? relationship?Source: ValueNotes analysis, 2012This whitepaper will also be useful to decision makers of corporations who are weighing outsourcingoptions for their media or marketing materials. It will help them plan and execute outsourcing strategyand to achieve better results. What do I do before outsourcing?This is a sample copy of the white paper “The Outsourcing Imperativefor Publishers”. To download the complete copy, go to bit.ly/EKCSWP1White paper | The Outsourcing Imperative for Publishers
  • 5. About ValueNotesValueNotes is a leading provider of market intelligence, research and consulting. Our mission is to helpclients gain competitive advantage via actionable intelligence. Since our inception in the year 2000, wehave provided reliable business decision support to several PE & VC firms, Fortune 100 companies aswell as small & medium businesses globally, through our research services and products.Our services cover a wide spectrum of bespoke business research services, including market research,competitive intelligence, financial research and strategic advisory about specific markets, industries andcompanies. Our research is designed to help clients make the right decisions and enhance theircompetitive advantage.We provide decision support research in areas like India entry strategy, M&A, customer and competitorbenchmarking, due diligence, investment appraisal and market opportunity assessment. Our decadelong experience spans industry sectors such as banking and finance, agriculture, automotive, biotech,capital goods, chemicals, communications, education, engineering & manufacturing, food & beverages,healthcare, hospitality, IT, ITeS, logistics & warehousing, media and entertainment, paints, publishing,etc.We publish industry dashboards and proprietary market intelligence on the outsourcing industry, withan emphasis on knowledge services (KPO). Within this, our focus areas include financial researchoutsourcing, legal process outsourcing, analytics, publishing, engineering services outsourcing andmarket research outsourcing.We exist to provide value to our customers, through research-based unbiased opinions and realisticrecommendations.For more information please visit www.valuenotes.biz or email us at research@valuenotes.co.in13White paper | The Outsourcing Imperative for Publishers