Alleviating Publishing                                     Pain Points at Their Source                                    ...
Table of ContentsStrategic Shifts: Significant Challenges and Opportunities ….......................................... 1S...
Strategic Shifts:                                                     Significant Challenges and Opportunities            ...
transformations. “The big strategic decision for Scholastic in 2011 was to drive forward with the transition to technology...
The underlying implications of such exigency have permeated the farthest cornerswithin virtually every publishing company....
ON HER COMPANY’S DECISION TO              However, in addition to investing significant upfront capital to acquireOuTSOuRC...
Among the primary challenges that can occur in working with consultants is that consultants also can be costly, as canthei...
This is of “primary and key importance,” says Ratan Datta, SPi Global’s Executive Vice President, Operations. For example,...
Another related benefit is scalability, notes Wheeler. “Service providers, by the very nature of working with a number ofp...
Seeking vendors thathave a track record          What Are Your Priorities When Looking For A Partner?**of quality clients ...
Datta suggests publishers look for a partner with “a global reputation, experience, as well as market information.”With an...
About SPi GlobalSPi Global partners with companies to maximize the value of their contentonline and offline. With escalati...
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Alleviating Publishing Pain Points At Their Source

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Alleviating Publishing Pain Points At Their Source. Options and tips for successfully addressing
publishers’ need to balance the resource demands
of books with the investment needs of digital. The study was conducted by Book Business magazine on behalf of
SPi Global in November 2011. More than 150 publishers provided data on
their biggest challenges, current outsourcing practices and budgets,
as well as future outsourcing needs.

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Alleviating Publishing Pain Points At Their Source

  1. 1. Alleviating Publishing Pain Points at Their Source Options and tips for successfully addressing publishers’ need to balance the resource demands of books with the investment needs of digital. This whitepaper was completed on January 3, 2012.Maximize the Value of Your Content
  2. 2. Table of ContentsStrategic Shifts: Significant Challenges and Opportunities ….......................................... 1Solutions for Surviving the Perfect Storm ……………………........................................................ 3What Publishers Are Outsourcing and What They Look for,or Should Look for, in a Partner ………………............................................................……………......… 7Conclusion: The Only Constant Is Change ……………................................................................. 9 *About the study The study was conducted by Book Business magazine on behalf of SPi Global in November 2011. More than 150 publishers provided data on their biggest challenges, current outsourcing practices and budgets, as well as future outsourcing needs.
  3. 3. Strategic Shifts: Significant Challenges and Opportunities The transformations that have taken place in the publishing industry over the past decade, let alone the past year or two, and the impact those changes are having on publishing companies worldwide are nearly impossible to summarize. A comment reported in Book Business magazine five years ago from Will Pesce—According to a new then-President and CEO of John Wiley & Sons—demonstrates the effects of whatstudy of 150-plus many analysts have called “the perfect storm” plaguing the industry: “Over the past five years, we have introduced more new business models than we had in thesenior-level publishing previous 193 years, in part because we are no longer limited by the physicality ofexecutives, the biggest books or journals.”growth opportunities The perfect storm has gained momentum in the years since, and has carried with it the winds of change in, obviously, the increasing availability of onlinein the industry are content (free and paid), eBooks, smartphones, tablets, apps, a historic economicperceived to be in recession, declining government, academic and library budgets, a drastically evolving retail landscape, and shifting consumer behavior towards book content.eBooks, digital content Illiteracy continues to plague the country as well as the industry, and the industryand delivery, as well as must continuously reckon with the force of technological change. However, as with most storms, breaks in the clouds have emerged, through which newnew titles. opportunities have shined brightly. As Pesce said, “Our investments in technology are enabling us to make our must-have content available to our customers to use in their professional and personal lives with greater immediacy, utility, and flexibility than ever before.” Dominique Raccah, Publisher and CEO of independent publisher Sourcebooks, said at the Book Industry Study Group’s 2009 Making Information Pay event that “the ‘content continuum’—the potential for expanding content and author brands into eBook, mobile and other digital content products—presents the largest opportunity I’ve seen in 22 years as a book publisher.” Since then, this somewhat early optimistic outlook on e-content has spread like wildfire across much of the industry. Especially in segments such as the academic publishing market, where the price of print textbooks has increasingly become an issue of great consumer focus, the prospect of lower-cost digital solutions has presented both ample new competitive hurdles, as well as opportunities in providing custom textbooks, enhanced digital and data products, licensing, and more frequent updates, among others. According to a new study* of 150-plus senior-level publishing executives (conducted by an outside party on behalf of SPi Global), the biggest growth opportunities in the industry are perceived to be in eBooks, digital content and delivery, as well as new titles. Print continues to stand sturdy as the foundation of publishing behemoths as well as mid-size and smaller companies. However, the growth in eBooks and other digital content formats likewise continues to weigh heavier each year. Stalwarts, such as Scholastic, the world’s largest publisher and distributor of children’s books founded nearly a century ago, are undergoing unprecedented strategicAlleviating Publishing Pain Points at Their Source 1
  4. 4. transformations. “The big strategic decision for Scholastic in 2011 was to drive forward with the transition to technology-enabled reading in our children’s consumer book business, estimating that one-third of Scholastic revenue will be digital by2015,” said Richard Robinson, Chairman, President and CEO of Scholastic Inc., in a November 2011 article in Book Business.Publishers have increasingly focused on and invested in growth opportunities in their respective markets and repeatedlyreinvented their business models. New challenges have arisen. According to the study, the No. 1 challenge publishers facetoday is developing a strategy around the industry’s growth in eBook sales, which is the primary challenge by almost half(48%) of survey respondents.Close behind are the challenges of marketing (print books, eBooks, or both) (45%), and eBook conversion/streamlining internalprocesses for output to multiple platforms (39%). What Is Your Company’s Biggest Challenge?** 48% Developing a strategy around the industry’s growth in eBook sales 45% Marketing (print books, eBooks or both) 39% eBook conversion, streamlining internal processes for output to multiple platforms 35% Balancing the resource demands of the print business with investment in digital 30% Negative effects of the economy/budget cuts among customers 29% Adapting to shifts in the book retail landscape 25% Cutting costs 23% Finding the right eBook conversion partners 17% Staffing internally to adapt to industry shifts 7% Others ** These results were from a study conducted by Book Business Magazine on behalf of SPi Global in November 2011.2 Alleviating Publishing Pain Points at Their Source
  5. 5. The underlying implications of such exigency have permeated the farthest cornerswithin virtually every publishing company. From publishers to editors, manufacturingand production managers to the more recently developed posts in digital strategy andimplementation, no executive is left unaffected.According to the survey, individual companies’ primary challenges in evolvingsuccessfully amidst the Sturm und Drang of the industry, include:• balancing the resource demands of print books with investment in digital;• staying on top of the digital landscape, and all of the various new formats and players in the field;• eBook conversion, streamlining internal processes for output to multiple platforms;• finding the right eBook conversion partners; and• staffing internally to adapt to industry shifts. The e-reader marketThese challenges and their discernible solutions are virtually inseparable began to fully erupt, and thefrom every strategic decision made with an eye toward a future whereby book “era of eBooks” has arrived.publishers can continue to provide the world with invaluable content, in anyformat, while remaining sustainable.Solutions for Surviving the Perfect StormIn what could be considered the heart of the economic recession, news headlines were fraught with stories of restructuring,cost-cutting, and painful layoffs. Those executives fortunate enough to keep their jobs during this national crisis were facedwith seemingly insurmountable new hurdles: Doing the work of several key positions folded into one. Time became farbeyond a luxury, and navigating the swiftly evolving technological landscape around them became their greatest need andbiggest challenge.The e-reader market began to fully erupt, and the “era of eBooks” has arrived. In the course of several years, dozens ofe-readers emerged onto the market, often with proprietary content formats, leaving publishers with many choices to make,and a seemingly unmanageable array of formats to navigate and for which to prepare content.Processes developed over decades upon decades for manufacturing print books were difficult and costly to transform, if newprocesses could even be designed for maximum results and efficiency.Three possible solutions have surfaced, presenting publishers with choices for how to successfully respond to the newdemands of the marketplace and the current economic environment in which they are operating:A. Hire staff and build a new internal infrastructure.B. Hire a consultant to guide publishers in their evolution.C. Hire a strategic partner.A. Hiring Staff and Building a New Internal InfrastructureSome ambitious publishers quickly invested heavily in developing new internal infrastructures and training or hiring staffto help implement this behemoth initiative. The pros to such a decision include maintaining control over the processes, andbeing able to customize and improve as the new infrastructure is put into place. Ideally, the publisher would then own itssystem and could spread the costs of the project over the new projects launched companywide for many years.Alleviating Publishing Pain Points at Their Source 3
  6. 6. ON HER COMPANY’S DECISION TO However, in addition to investing significant upfront capital to acquireOuTSOuRCE E-PuBLISHING SERVICES leading-edge technology and maintain it over time, such projects are almost always a significant drain on time and staff resources, from shopping for such“It’s purely a resource solutions, implementing a plan, educating staff, troubleshooting during the implementation process, etc.issue. We can’t hire “It’s purely a resource issue,” says Anne Spencer, Vice President of Design andmore people to scale Production for Jones and Bartlett Learning in Boston, about her company’sup to the extent we decision to outsource e-publishing services versus trying to handle them in-house. “We can’t hire more people to scale up to the extent we must. Furthermore, manymust. Furthermore, of the skills are relatively easy to ‘commoditize,’ to free up in-house resources formany of the skills more higher-level tasks.”are relatively easy “The costs are somewhat compelling as well [to try to manage processes in-house], but they get significantly nullified or reduced by initial ramp-up tasks,to ‘commoditize,’ document preparation, quality assurance, and ongoing vigilance on our part toto free up in-house ensure product integrity,” she adds. It is not unheard of, unfortunately, for publishers to invest in a technology solutionresources for more only to experience difficulties, as well as significant additional, unanticipatedhigher-level tasks.” costs in integrating those technologies effectively and efficiently with their current hardware, systems, and processes. Projects have even been abandonedAnne Spencer mid-implementation, leaving the publisher with an ineffective infrastructure—Vice President of Design and ProductionJones and Bartlett Learning back at square one—and a big dent on their P&L. Dave Morris, Co-founder and Publisher of New Year Publishing in Danville, California, says his company faced challenges with modifying its current workflows and formats. “Our existing resources were not up to speed on how to modify our existing .indd files into ePub and .Mobi, since they were not originally designed with those outputs in mind. They basically required a restart of the designs,” he said, leading to his company’s decision to seek help with the transition. For those who are successful in implementation, they face other risks. By the time many publishers (those who can afford to even attempt such momentous initiatives) can shop for, design, and implement new processes and costly new infrastructures, new devices and platforms are likely to be rapidly transforming market. This requires additional new processes and, often, technology. B. Hiring a Consultant Consultants are a staple in most industries, and, especially during periods of significant change, their expertise can be a valuable asset to companies seeking guidance. Consultants often have an objective view of multiple, similar projects that have been implemented, and may know the pain points in selecting partners and implementing new infrastructures, as well as best practices for training and hiring new staff.4 Alleviating Publishing Pain Points at Their Source
  7. 7. Among the primary challenges that can occur in working with consultants is that consultants also can be costly, as cantheir suggestions for solutions to your company’s hurdles and strategic goals. Another is that, while their expertise maybe significant, every publishing company is unique in its processes, its business objectives, its resources, and its internalstructure. A consultant’s expertise is limited, in that sense, to the projects on which he or she has done and the companieswith which he or she has worked.Another consideration is that consultants are usually working on more than one project at a time, and your company canbe subject to the consultant’s schedule and other commitments. Because publishing is such a time-sensitive business, andcapital investments accrue each day that new processes cannot yet be implemented effectively, working with consultantsmay not be the best option when speed-to-market and costs are a concern.Related to this, consultants often are constantly seeking new business and working to complete projects, and may notnecessarily be spending the time to stay up-to-date on new technologies or forge long-term relationships with clients.To gain maximum return on their investments, publishers who instead source work to vendors should consider (and put totask) their vendors as partners who can serve them in a consultative manner.C. Hiring a Strategic PartnerVendors offering solutions such as digital conversion and other e-publishing services, among others, will, almost without fail,tell you that this option is the most cost-effective and sustainable long-term solution for quality product development anddistribution, as well as strategic growth. This is a sound business proposition.The result of the perfect storm for many publishers has been to batten down the hatches to survive—in other words, to focuson their core competencies: finding, working with and developing spectacular authors and content. Anything and everythingis being evaluated—with a number of publishers deciding to outsource non-core functions. For example, publishers haveincreasingly outsourced distribution and fulfillment (including the ground-breaking decision in 2011 by HarperCollins to haveRR Donnelley handle fulfillment of all HarperCollins’ new releases, and of its Zondervan division’s frontlist and backlist titles).“Internal staff should be reserved for key tasks and processes that are core to the publisher’s business. If a process or task canbe better done by a vendor, or done for less with no loss of quality, these are very low risk items to outsource,” agreesJohn Wheeler, Vice President, Strategy and Emerging Technologies, for SPi Global—which provides publishing, ePublishing anddigital solutions, among other services, to the publishing industry.“Non-traditional areas like e-publishing and conversions are two areas where most publishers lag behind the vendorcommunity as far as process and technologies are concerned, and in most cases these are areas where the publisher cannotadd value beyond the vendor’s when it comes to execution.”Cost-management has been an increasing concern, with promises of the post-recession rebound wavering and uncertain,as well as the impact of eBooks and other digital content on traditionally print-centric businesses. Investment decisions aremade increasingly carefully and cautiously.Lower costs, says Morris, is one of the biggest benefits in working with an outside partner. “It’s a lot cheaper, and they work ona set fee basis after reviewing the project.”Price will always play a factor,” says Wheeler. “As publishers are getting squeezed by the economy, they try to save moneywhen negotiating with their partners.”Other substantial benefits of partnering with a third-party provider include access to leading-edge technologies andstaff expertise.Alleviating Publishing Pain Points at Their Source 5
  8. 8. This is of “primary and key importance,” says Ratan Datta, SPi Global’s Executive Vice President, Operations. For example, hesays, “SPi itself symbolizes ‘Solutions, People, Innovation.’ [We have a] dedicated technology team, a process re-engineeringteam and an Innovation Lab, working on process improvement, automation and cutting-edge technological solutions. Thisbecomes one of the many key differentiators, not only between in-house efforts and outsourcing, but between variousvendors with which publishers can choose to partner.”As technologies change (especially at their current pace), vendors provide publishers with access to those new technologies,without the requirement of additional capital investment—and potentially the loss suffered from having invested in costlyand now-obsolete technology.“A partner who stays up-to-date with the latest technology trends will be worth their weight in gold because they canprovide new direction for a company. Publishers are all looking to go online and maximize their presence in the digital world.They’re not sure of the roadmap, to get where they want to go. A partner can certainly help create that roadmap and providenew ideas, which the publishers may not have envisioned,” Datta adds.“A strong partner is looking to develop a relationship, which will move past the end of the current job,” notes Datta,addressing the benefit of vendor-partners that function as an extension of your in-house team. One-off jobs are not usuallywhat outside vendors are in business for—so your success (and continued work with them) is their success. “A good vendordoesn’t simply perform a service; they will provide innovative ideas to further grow a business,” he says.Reflective of that, as well as of the premise of serving as an extension of your internal team, is the goal of many outsourcepartners to help publishers set up or improve their internal processes. This also can be a benefit in terms of combating staffturnover at a publishing company. If a publisher invests significantly to build the expertise of one or a few key staff members,and any of those staff members leave, the expertise leaves with them; not so when dealing with an outsource partner, whosewhole team is dedicated to expertise in specified areas.“The goal of any partner is to provide leadership in operational excellence and ease the burdenon publishers of today. From pointing out bottlenecks to advising on a new technology, it’s upto the partner to add as much value as they can – all these while providing a competitive price andtop-notch quality,” says Datta.As technologies change, vendorsprovide publishers with accessto those new technologies,without the requirement ofadditional capital investment—and potentially the loss sufferedfrom having invested in costly andnow-obsolete technology.6 Alleviating Publishing Pain Points at Their Source
  9. 9. Another related benefit is scalability, notes Wheeler. “Service providers, by the very nature of working with a number ofpublishers across the industry, are able to bring a wealth of best practices to the table along with the organizational muscleand resiliency to get the biggest jobs done,” he says.What Publishers Are Outsourcing and What They Look for,or Should Look for, in a PartnerCoinciding with what publishers have reported as their greatest challenges today—developing successful strategiesaround the growth in eBook sales, and eBook conversion/streamlining internal processes for output to multiple platforms—the largest area that publishers outsource is ePublishing and Digital Solutions (58% of respondents), according to theSPi Global study. Which Services Do You Outsource?** ePublishing and 8% 20% Digital Solution 24% Publishing Solutions 5% Content Platforms and Technologies Others 15% Marketing Services Support 58% Content Enrichment 21% Customer Support Services ** These results were from a study conducted by Book Business Magazine on behalf of SPi Global in November 2011.The highest percentage of publishers by far (40% of respondents) are looking for ePublishing and Digital Solutions partners,followed by general publishing solutions (13%) and content platforms and technologies (13%). Almost a third of publishersindicated that their outsourcing budget will grow next year, with 35% reporting that it will remain the same.While many publishers report that one of the biggest benefits of working with a third-party partner is cost savings, cost takesa back seat when it comes to publishers’ top priorities when searching for a partner. Product quality ranks at the top of thelist, with 93% of respondents to the survey indicating this as highest priority. Cost of services ranks next (91%), followed byretaining control over content (87%) and customer service (86%). Other factors of significant priority are: ability to leverage apartner’s technology and expertise (79%), speed to market (76%) and improving current processes (75%).Alleviating Publishing Pain Points at Their Source 7
  10. 10. Seeking vendors thathave a track record What Are Your Priorities When Looking For A Partner?**of quality clients and 93%projects, therefore, Product qualityis recommended. 91%Publishers also would Cost of servicesbe wise to evaluate 87%a potential partners’ Control over contentdirect experience 86%within the publishing Customer serviceindustry. 79% Ability to leverage partner’s technology and expertise 76% Speed to market 75% Process improvement ** These results were from a study conducted by Book Business Magazine on behalf of SPi Global in November 2011. “While most publishers claim quality to be the highest concern, time-to-market and price rank very high as well,” says Wheeler. “The uncertainty and confusion around the push into ‘e’ from ‘p’ (electronic from print) further muddies the waters, since processes, procedures and technologies are not mature enough for the key metrics required to manage the cost/quality/time triad.” Still, “Quality is always most important,” continues Wheeler. “If you do the job at a lower cost, but the quality is compromised, the brand will suffer.” “Product quality will be the primary criterion since this will play a major role in enabling customers to retain and enhance their customer base and market share, despite the negative effects of the economy and budget cuts. The objective would be to provide the best quality and in a cost-effective way,” stresses Datta. Seeking vendors that have a track record of quality clients and projects, therefore, is recommended. Publishers also would be wise to evaluate a potential partners’ direct experience within the publishing industry. “We find that a number of vendors have little publishing experience, but lots of programmers, developers and willing hands who lack the context of publishing experience,” says Jones and Bartlett Learning’s Spencer.8 Alleviating Publishing Pain Points at Their Source
  11. 11. Datta suggests publishers look for a partner with “a global reputation, experience, as well as market information.”With another major benefit of working with third-party partners being access to the latest technology, and knowledge ofbest practices and cutting-edge processes, publishers should seek partners that have in-house technological developmentteams, who may also specialize in workflow solutions, understand their clients’ objectives, and help develop better processes.“Publishers are looking for their vendor partners to move from ‘What’ organizations, meaning ‘what do you want us to do’, to‘How’ and ‘Why’ organizations. These are vendor organizations asking the questions of publishers about ‘how are you doingthis’ and ‘why are you doing this’,” shares Wheeler. “The gap is widening between vendor partners. Publishers are looking farbeyond competitive pricing, which is a basic expectation today. They are expecting vendors to understand their business andprocesses and look for continuous improvement to processes and content.”“Even though the times are changing, the publisher’s goal is to acquire and validate content and to work with the consumerto understand the best way to offer content . Smart publishers partner with vendors that can support these key roles andhelp them in the manufacture and distribution of the final product,” adds Datta. “To be sure, the publisher needs to have ahandle on emerging trends and technologies, but should use that as a gauge to choose the right vendor partners rather thanto attempt to perform functions that are better done by others.”Along those lines, publishers also should seek partners who have “expertise and ability to offer a complete gamut of services,”and who have significant “capabilities and infrastructure available,” says Datta.The primary means by which publishers can ensure a successful relationship with vendor partners—in addition to doingthe preliminary research into a potential vendor’s credentials and relevant expertise—is to be explicit about their goalsand expectations from the vendor, to ensure that the vendor truly will function as a partner in achieving the desired goals.Reliable vendors have ample incentive to perform as expected or better than expected in such relationships in order tomaintain a long-term relationship and utilize the vendors’ assets, including technological prowess and accessibility, expertise,and manpower.Conclusion: The Only Constant Is ChangeIn today’s publishing marketplace, the only thing publishers can rely on is constant change. Strategic decisions must bemade to enable publishing companies to maximize their strengths and core competencies.The challenge of keeping up with new technology and content output options is fluid and fast. By the time a publishingcompany hires a knowledgeable team or trains staff, and invests in and implements new technologies for new internaldepartments responsible for pursuing emerging opportunities, current technologies may already be obsolete.In order to avoid the publishing equivalent of swimming upstream, the publishers’ best option is to find a strategicpartner—a partner who not only provides leading-edge knowledge of developing technologies, but also a roadmap forthe future.Alleviating Publishing Pain Points at Their Source 9
  12. 12. About SPi GlobalSPi Global partners with companies to maximize the value of their contentonline and offline. With escalating costs of production and printing, changingcustomer preferences, and the need to adapt, SPi Global enables organizationsto exploit and invest in new media technology. With a complete suite of digital,publishing, content enrichment, marketing and customer support services,we help companies gain a competitive advantage through our unique andinnovative solutions.For over 30 years, SPi Global has been helping leading publishers, not-for-profitorganizations, information providers, and Fortune 1000 companies increase theirrevenues, reduce costs, improve time-to-market, and automate operations. Withover 500 clients and 7,000 content specialists, no job is too large for us.For more information on how SPi Global can help youmaximize your content online and offline, please contact:Jamie IsraelDirector of Marketing, Content SolutionsM 732 662 8345jamie.israel@spi-global.comwww.spi-global.comValue | Driven

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