Offshoring in the publishing vertical

Updated: Dec 26 2005, 05:30am hrs
Outsourcing of business publishing work to India is expected to rake in a lot of moolah for business process outsourcing companies. Estimates suggest that around $200 million worth of business publishing work is currently outsourced to India.

In fact, this is just the tip of the iceberg. Sample this: The global publishing services business has a turnover of over $900 billion annually. Assuming that 1% of this business is outsourced to India, it is still a $9 billion opportunity for BPO companies. "The total publishing outsourcing revenues of the Indian industry are estimated to be currently around $20 million, whereas the global opportunity for publishing outsourcing is estimated at $8.1 billion," says Sourav Mukherjee, CEO, Netscribes, a Mumbai based knowledge process outsourcing company. The sectors that typically outsource business publishing work include banking and financial services, technology and healthcare industries.

The trend of outsourcing publishing work started way back in 1977 when Macmillan set up its offshoring unit in India. Thomson Digital, Techbooks, Integra and Newgen Imaging all service their international customers from India.

Mr Mukherjee explains that the pressure to cut down on costs is forcing publishers to outsource work to low cost destinations like India. "Publishers in the US and Europe are facing losses. The cost of printing has increased but the advertisement revenue has gone down since electronic media is now the preferred medium for advertising. This is forcing many publishers to outsource work to countries like India which can provide the same services at a far lesser cost," he adds. The cost advantage of outsourcing publishing work to India is huge.

According to Mr Mukherjee, through outsourcing publishers can reduce costs by 50% or even 70%. Under business publishing outsourcing, newsletters are the largest category accounting for 53% of all business publishing in 2001, according to Publications Management. B2B journals and magazines comprises 24% of the market, while tabloids accounted for 6%. E-publication, which accounted for 17% in 2001 is the fastest growing type of business publishing.

The work rates charged by companies are either on a per-hour or a per-page basis, depending on the service offered, and the type of business model.