The Outsourcing Imperative

for Publishers

August 2012

Table of contents
The Outsourcing Imperative for Publishers ........................................................................... 1
What do I do before outsourcing? .......................................................................................... 1
Outsourcability of functions ................................................................................................................... 2
Benchmarking performance .................................................................................................................. 3

How do I select the right service provider? ........................................................................... 4

How can I ensure a successful outsourcing relationship? ................................................... 5
Establish a water-tight SLA ................................................................................................................... 5
Transitioning to the service provider...................................................................................................... 7

Am I getting RoI? ..................................................................................................................... 8

Return on Outsourcing .......................................................................................................................... 8

Works cited ............................................................................................................................ 12

About ValueNotes .................................................................................................................. 13

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White paper | The Outsourcing Imperative for Publishers

Table of exhibits
Exhibit 1: Four questions to ask before outsourcing ................................................................................... 1
Exhibit 2: Outsourcability matrix ................................................................................................................. 2
Exhibit 3: Proclivity to outsource services ................................................................................................... 2
Exhibit 4: Outsourcability of the advertising process .................................................................................. 3
Exhibit 5: Performance measurement in ad production ............................................................................. 4
Exhibit 6: Vendor selection criteria .............................................................................................................. 4
Exhibit 7: Typical parameters in SLAs .......................................................................................................... 6
Exhibit 8: Three stage transition process ..................................................................................................... 7
Exhibit 9: Calculating return on investment ................................................................................................ 8
Exhibit 10: Total Cost of Outsourcing .......................................................................................................... 9
Exhibit 11: Calculating the tangible cost savings ......................................................................................... 9
Exhibit 12: Benefit from faster time to market.......................................................................................... 10
Exhibit 13: Costs and benefits of outsourcing relationship over 3 time periods ....................................... 10

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White paper | The Outsourcing Imperative for Publishers

The Outsourcing Imperative for Publishers

Circulation and advertising sales are the main revenue streams for publishers in the newspaper and
magazine business. An analysis of the latest circulation and advertising revenue totals for newspapers
and magazines, released by the Newspaper Association of America and the Association of Magazine
Media, 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 as
a 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 responsibilities
Adequate preparation before outsourcing may be the difference between long-term success and
failure. 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-oninvestment (RoI) of outsourcing. Exhibit 1 below depicts the typical outsourcing process of a firm.
Exhibit 1: Four questions to ask before outsourcing

What do I do before
outsourcing?

How do I select
the right service
provider?

How can I ensure

a successful
outsourcing
relationship?

Am I getting RoI?

Source: ValueNotes analysis, 2012

This whitepaper will also be useful to decision makers of corporations who are weighing outsourcing
options for their media or marketing materials. It will help them plan and execute outsourcing strategy
and to achieve better results.

What do I do before outsourcing?

This is a sample copy of the white paper The Outsourcing Imperative
for Publishers. To download the complete copy, go to bit.ly/EKCSWP

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White paper | The Outsourcing Imperative for Publishers

About ValueNotes
ValueNotes is a leading provider of market intelligence, research and consulting. Our mission is to help
clients gain competitive advantage via actionable intelligence. Since our inception in the year 2000, we
have provided reliable business decision support to several PE & VC firms, Fortune 100 companies as
well 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 and
companies. Our research is designed to help clients make the right decisions and enhance their
competitive advantage.
We provide decision support research in areas like India entry strategy, M&A, customer and competitor
benchmarking, due diligence, investment appraisal and market opportunity assessment. Our decade
long 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, with
an emphasis on knowledge services (KPO). Within this, our focus areas include financial research
outsourcing, legal process outsourcing, analytics, publishing, engineering services outsourcing and
market research outsourcing.
We exist to provide value to our customers, through research-based unbiased opinions and realistic
recommendations.
For more information please visit www.valuenotes.biz or email us at research@valuenotes.co.in

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White paper | The Outsourcing Imperative for Publishers