Trade publishers have been outsourcing parts of their functions for over a decade, not just as means to tackle cost pressures, but also as part of their business model. The exhibit below represents the responses of respondents that have rated the challenges they face in their publishing business vis-A-vis effective solution/mitigation via outsourcing. This is based on a comprehensive survey of publishers conducted recently by us.
The challenge to adapt to new technology can be very effectively dealt with by outsourcing, as indicated by the responses. Trade publishers also consider outsourcing to be highly effective to address lack of in-house capability. Addressing new geographies is also considered to be a constraint that outsourcing can mitigate very effectively.
Cost and margin pressures can be successfully mitigated by outsourcing, yet not all respondents believe so. Diversifying into new areas of business and providing value-addition within current offerings is another area where outsourcing is yet to be viewed as a complete solution.
In spite of the pressures, current level of servicing does not offer publishers a strong reason to outsource. Outsourcing for cost arbitrage and value-addition has not been successfully mitigated while outsourcing. Interestingly, a small percentage of respondents feel that outsourcing cannot mitigate any challenges.
Source: ValueNotes sourcing analytics (http://www.sourcingnotes.com/content/view/619/1/).
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