taboos-in-publishing-outsourcing-deanta

www.deantaglobal.com

THE “TABOOS” IN PUBLISHING

OUTSOURCING 2014 James Hill – VP Sales and Marketing Publishing Services -

Deanta Global


Contents

§  Service Challenges In Publishing Outsourcing

§  Provider Selection Process in Publishing Outsourcing

§  Provider’s Branding-Marketing - Issues in Publishing Outsourcing


How Publishers Often Feel About Outsourcing…


Publishing Outsourcing - Overview

$1.2+billion industry: 80% in India •  Mature market-entrenched competitors-market consolidation •  Many services are heavily commoditized with significant price

reductions in the last 4 years •  Future growth for service providers and what services? •  How do publishers select new service providers? •  What are the current challenges in the industry for both buyers

and providers? •  Why do publishers seem to often buy on price alone, and

where is innovation?

80% of publishers are disappointed, or only moderately happy with outsourcing services offshore

•  “So, why is the market growing with such low levels of satisfaction from buyers?”

•  “So, what is the value addition service providers offer to publishers beyond pricing?

Publishing Outsourcing

2009 Value Notes Study


Publishing Outsourcing-Strategic Issues

How do publishers evaluate a new offshore service provider? •  Is there really a systematic, professional process? •  Why do publishers often resort to buying on pricing alone? •  Do publishers see value with providers beyond pricing?

Do offshore service providers understand competitive positioning and branding beyond pricing? Providers’ Strategic Questions: •  “How do I differentiate my services beyond pricing and add value through

innovation?” •  “How do I gain new clients, or how do I grow the sales in existing accounts?” •  “How do I provide innovation and communicate that effectively to

publishers?”


Publishing Outsourcing: Provider’s Branding and Sales Challenges

•  HfS research study in 2014: “Why The Outsourcing Industry Is So Horrible at Marketing” (http://www.horsesforsources.com/outsourcing-horrible-marketing_032514)

•  “Very poor and boring communication to corporate society about the benefits of services and outsourcing.”

•  “Whatever happened to people talking and writing in plain English and having a personality to make this stuff interesting?”

•  “Most providers are still not investing in the right sales talent.”

Critical Issues: •  Publishers involved in an open, public dialogue about the industry? Lack of publishing on

publishing outsourcing in journals or magazines? •  Marketing outside of the targeted sales geography? Marketing from India for the USA is almost

always a bad idea •  Sales and marketing not synergistic? Sales people in the geography where sales are forecasted

involved in the marketing material they use for new clients? •  Provider’s marketing material often driven by features, rarely about benefits. Web sites: lack

testimonials-case studies; downloads that do not download •  Providers marketing is often a “pig with lipstick: still a pig” (Deborah Kops “Buying Brand”

Outsourcing Magazine)


HFS Outsourcing Highlights 2011-2014

Key statistics •  Buyers relying more on their own research and “learnings” than

ever : Buyers not easily influenced by marketing •  Critical marketing and branding issue with service providers:

•  “29% rely more on peers in other buyer organizations” •  “22% rely more on analysts and research firms” •  “21% rely more on conferences and events” .

Buyers achieving only modest business results beyond cost reduction •  Gaining access to new business process acumen – 30% say not

effective •  Gaining access to new technology – 31% say not effective •  Providing new, creative methods of achieving business value

(innovation) – 35% say not effective •  Reducing operating costs – 46% say “very effective.”

Two Thirds of outsourcing deals fail to deliver “innovation.”

Horses for Sources (HfS) 2011

Study with the London School of

Economics Outsourcing Unit

(covers publishing, other industries)


HFS Outsourcing Highlights – Opposing Perceptions?

Buyers’ concerns limiting outsourcing in 2011 •  Not convinced of service providers’ capabilities – 39% very •  important factor •  Not confident in long term business benefits – 39% very important factor •  Immediate cost savings not attractive enough – 37% very important factor.

Providers often seem unaware of buyers’ perception of them: Key branding issue with vendor selection

•  Immediate cost savings are not attractive enough – 43% very important factor •  Not ready for such a cultural change – 42% very important factor •  Not convinced of long term business benefits – 42% very important factor •  Disruption to their business is too great – 35% very important factor •  Not convinced of provider’s capabilities – 29% very important factor.



HFS Outsourcing Study Highlights

Providers underestimate importance buyers place on change management, governance, and culture -- critical isues

•  Mismatch in perception of need from both buyers and providers

•  Providers seem to not know what buyers “really want to buy” Ability to support change management and governance

•  44% of buyers say this is critical from providers •  34% of providers think this is critical for buyers

Culture of the provider’s delivery organization •  34% of buyers view this as critical from providers •  20% of providers view this as critical for buyers

Innovation in outsourcing is elusive •  Reducing operating costs -- 46% very effective •  Access to new business process acumen - 30% not effective •  Access to new technology – 31% not effective •  Providing innovation for business value – 35% not effective

25% difference in perception

45% difference in perception

Offshoring is great for cost cutting, but what else is

there?


Publishing Outsourcing: Provider Issues

Issues to improve buyer/provider relations and increase satisfaction levels for outsourcing

•  Providers need to focus on technology innovation, but not exclusively: “soft skills” are critical to buyers especially effective communication and problem solving

•  Providers need to focus on how they are branded in the market compared to their competitors and leverage testimonials and case studies: buyers are impressed by what others say about providers, not just what providers say in their marketing material: Branding shows that “you know who you are” in the market

•  Providers need to focus on value added service issues, not just price: this moves buyers beyond the trap of seeing providers as mere commodity service providers, with no differentiation

•  Providers need to be more aware of cultural issues, especially communication processes, problem solving, and quality issues: “stop selling on price”

•  Providers need to understand business limits and the power of under promising, and over delivering: it is OK to say--“no—we can not do that”

•  Providers need to understand that “facts” are important, but “perception” is often more important

•  Providers written and verbal communications can be a “deal breaker” with some publishers


Publishing Outsourcing: Buyer Issues

•  Publishers need to be more realistic about the ROI of outsourcing -- especially in the first year with a new service and/or a new provider

•  50% cost reduction in the first year is often exaggerated, regardless of what providers say in their marketing

•  Publishers need to be careful about harboring high expectations, especially with new services, or new providers

•  Expect a learning ramp-up period of 6 months, minimum, often 12 months

•  Publishers need to think strategically, not tactically, and see the service provider as a business partner, not as a minimum wage service provider in an non-collaborative business relationship

•  Publishers choosing the wrong service provider can be very expensive to change •  Publishers need to think beyond pricing in the provider review process to establish long term

value with offshore services that have a substantive impact on business process and strategy •  Publishers need to understand and “manage” the communication and cultural variances with

offshore providers depending on geography •  Publishers need to encourage service providers to take risks and initiative, and be an innovative

problem solver


References

References: Value Notes 2009 study on “Why Publishing Outsourcing Is Still Taboo” http://www.sourcingnotes.com/blog/why-is-the-outsourcing-of-publishing-services-still-taboo

The state of outsourcing 2011 from Horses for Sources (HfS) in conjunction with the London School of Economics - http://www.horsesforsources.com/hfs-lse_091410

Deborah Kops, “Buying Brand,” Outsourcing Magazine (November 15, 2010) – must read for outsourcing service providers on developing competitive positioning and branding programs – http://www.outsourcemagazine.co.uk/articles/item/3621-buying-brand

Joerg Stimmer “Peopleware: The Human Parameter As The Critical Success Factor Of Outsourcing” – Outsourcing Magazine (June 2011) – importance of “soft skills” in outsourcing relationships http://www.outsourcemagazine.co.uk/articles/item/3971-peopleware-the-human-parameter-as-the-critical- success-factor-of-outsourcing

CIO, June 13, 2011 “No. 1 Gripe with Outsourcers: Lousy Service,” Sephanie Overby. Article based on the http://www.cio.com/article/684268/No._1_Gripe_with_Outsourcers_Lousy_Service.

HfS research study in 2014: “Why The Outsourcing Industry Is So Horrible at Marketing” (http://www.horsesforsources.com/outsourcing-horrible-marketing_032514)

HfS research study 2014 about lack of innovation in outsourcing (http://www.horsesforsources.com/churn-outsourcing_090314)


THANK YOU

Deanta Global Publishing

Email: [email protected] Europe: +353 16708040 USA: +1 917 300 0662 Asia: +918 7545 02334 Deanta Global Publishing Services Limited 51 Clontarf Road, Dublin 3, Ireland Deanta Publishing Services Private Limited Old.No.22, New no.39, P.S.Sivasamy Salai, 1st Street, Chettinad Chambers – 2nd Floor Mylapore, Chennai 600004, India

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