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Outsourcing in the Ed. Publishing SectorOutsourcing has often been the topic of passionate debate, particularly in the United States. American companies that turn to lower-priced offshore resources to save on operating costs are often seen as "un-American," or accused of taking advantage of workers in underdeveloped countries. At the same time, economists argue that outsourcing will ultimately strengthen the U.S. economy by enabling financial and organizational growth and, consequently, creating new jobs. Controversy aside, the business world has embraced this strategy as a new reality of the global marketplace, and outsourcing has become an important, if not essential, part of doing business in the 21st Century. In the publishing industry, this means not only offshoring printing services (as some companies have been doing for decades), but looking overseas for prepress, graphic design, and even editorial services. Outsourcing by the numbers - In 2005 the McKinsey Global Institute identified 18.3 million jobs that could be performed anywhere in the world, equivalent to 7.5 percent of total global employment. It estimated this number would grow to 19.4 million jobs globally by 2008.* - In 2005 the McKinsey Global Institute estimated $18.4 billion in global IT work and $11.4 billion in business-process services had been shifted abroad. - In 2002 Forrester Research predicted that by 2015 as many as 3.3 million U.S. jobs and $136 billion in wages will move overseas. - In 2004 market research firm Global Insight estimated that outsourcing created 90,000 new U.S. jobs as a result of increased revenue and organizational restructuring. - In 2004 The Times of India reported outsourcing of content and all other services in the publishing industry to total $2.5 billion globally. - The publishing BPO market in India totaled approximately $250 million in 2005, and BPO service provider Infomedia India Ltd. estimated the industry's annual growth at around 30 percent. * The McKinsey study examined employment in eight sectors: Packaged Software, Pharma, Automotive, IT Services, Insurance, Retail Banking, Healthcare, and Retail. What is being outsourced? 1. Printing - Because printing is language and culture agnostic--i.e., someone doesn't need to understand English in order to print out an English-language book--it's the easiest and most basic form of outsourcing within the publishing industry. In fact, publishers have been employing offshore printers since the 1970s. "Because they've been doing it for so long, overseas printers have really perfected the process of providing quality printing services," says Michael Ross, Senior Vice President and Education General Manager at Encyclopaedia Britannica. "Today, American companies can't even come close to their prices, especially for things like short runs or color." Where to find printers: Some of the more well-known countries for printing service providers are Singapore, Hong Kong, and Malaysia. 2. Digital Services - The development of new communication technologies and the arrival of digital prepress processes in the 1990s made it possible for other parts of the publishing process to move overseas. Also somewhat language and culture agnostic, digital formatting and file conversion became the next logical step in the evolution of outsourced publishing services. Where to find digital service providers: Because this requires a somewhat higher level of communication, English-speaking countries tend to be the leaders in digital services. India and the Philippines top this list. 3. Graphic Services - Again, the evolution of the publishing industry in the form of graphic design, illustration, and computer animation brought about the demand for higher-level services overseas. As was the case with digital prepress services, graphic services require an even higher level of dialogue and communication, says Ross, meaning offshore designers and programmers must be well-versed in the English language, and relationships often must be built and nurtured over a number of years before the workflow becomes as efficient as it can be. Where to find graphic service providers: Despite the language barrier, the Czech Republic and Korea are hotspots for computer animation, says Ross. In fact, the summer blockbuster TheSimpsons Movie was done entirely in Korea. However, India and the Philippines are very popular in this sector as well because of their English-language abilities. 4. Editorial Services - Publishers looking for ways to reduce costs while turning out large numbers of quality content may look to outsource editorial services such as copyediting, abstracting, indexing, and even content creation. However, looking to an offshore provider to fulfill these tasks can be extremely risky, especially when the service provider doesn't speak English as a first language. According to Ross, outsourcing editorial work is typically reserved for larger companies who need to turn out a huge amount of work on a tight deadline and that have the resources to monopolize and supervise an overseas team for a long period of time. Benefits and Challenges of Outsourcing The most obvious benefit of outsourcing is cost reduction and earnings growth, but as a January 2006 BusinessWeek special report pointed out, "many executives are discovering offshoring is really about corporate growth, making better use of skilled U.S. staff, and even job creation in the U.S., not just cheap wages abroad." According to the McKinsey Global Institute, the factors inhibiting companies from outsourcing are both regulatory and company-specific barriers. 1. Operational barriers - Sometimes the logistics of certain business processes make them poor candidates for outsourcing. For example, if it takes twice as long to communicate the specifics of a job to an offshore editing team than it would take to do the job in-house, the cost savings realized by outsourcing the job will be eclipsed by lost time and productivity. 2. Management attitudes - According to McKinsey, top management commitment to offshoring has a strong impact on whether a company will pursue it, even in cases where it would clearly be a logical and effective solution. Management may be opposed to the concept for fear that they will eventually have to move overseas or for political or social reasons. The bottom line, says Ross, is if there isn't complete and total buy-in on all levels, the strategy will almost surely fail. 3. Structural barriers - Outsourcing may not be an option if IT architecture is unsuited to supporting communication on a global level. 4. Offshoring regulatory barriers - Market regulations in the countries providing offshore labor or services may also present a challenge, and navigating these barriers may make the prospect of outsourcing unappealing or unfeasible. Who should outsource? Questions, ideas, or in need of more information? Please contact Stacey Pusey at 302-295-8349. |
"The
Future of Outsourcing" "Now,
outsourcing of media, publishing work" "The
Emerging Global Labor Market" "The
Real Cost of Offshoring" "Report:
Offshore Outsourcing Helps U.S. Job Market" Publishing Without Boundaries: How to Think, Work, and Win
in the Global Marketplace
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