22 Aug 12 Ranking and due diligence crucial to PUBO service provider selection

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A publisher looking to outsource a non-core process can choose from a large spectrum of services in the publishing outsourcing (PUBO) segment. Once the publisher has identified a process to outsource, and developed metrics to measure the productivity of internal performance, it is time to shop for a service provider.

In our conversations with publishers and service providers about which criterion are used to arrive at an outsourcing partner, technology offering, prior experience, pricing, and scalability were consistently mentioned as important, among others. These criteria are listed in the exhibit titled “Important service provider selection parameters”. Among those accorded a high priority are:

  • Domain knowledge – As publishers are looking for service providers that have relevant skill sets
  • Quality of deliverables – Publishers usually consider an amalgamation of adherence to the parameters in the Service Level Agreements (SLAs), and the technical ability of the outsourcing team
  • Value-additions – Publishers want service providers to be aware of the changing market place, showcase a consistent growth in technology, and display continuous improvement in their business

A publisher needs to weigh each category in the adjacent exhibit according to the needs of the firm, and grade each service provider that responds to the Request for Proposal (RFP), and add the ratings to arrive at a scoring system.

Many firms confuse RFP, which is conducted when you want basic information from a range of service providers, with due diligence, which is evaluating a service provider before signing a contract. This process should begin when you first start looking at a service provider as a potential partner, and not right before the contract is due to be signed. The exhibit below titled “Typical due diligence parameters” depicts the investigatory steps to be taken by the publisher.

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Traditionally, due diligence includes confirming the existence of the firm, investigating its corporate history and the profiles of its key management members, reviewing its financial documents for evidence of stability, investigating its infrastructure, security, and technology, and last, but not the least, getting testimonials from current and past clients.

If the geographical distance and costs involved are excessive, a preliminary due diligence could be outsourced to a consultant or research company .However, we recommend a personal site visit to affirm the affinity between the companies, since it is an important part of the communication process. Lately, publishers have developed very stringent due diligence guidelines because they don’t want any finger pointing once contracts have been signed.

Selecting the right service provider is critical to the success of any outsourcing initiative. Today’s publishing market requires rapid growth, and most publishers require a service provider with new media capabilities, and many modes in delivery of content. An upcoming white paper from ValueNotes, sponsored by Express KCS, highlights the outsourcing process newspaper and magazine publishers should follow, the service provider selection criterion and due diligence practices, and about the Return on Investment (RoI) of outsourcing. This white paper is designed to help publishers plan and execute their outsourcing strategy and to achieve better results.

ValueNotes Research
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